Global finance officials gloss over trade tensions at G-7 Summit

Mint

23-05-2025

BANFF, Alberta—Finance officials from some of the world's most powerful nations glossed over simmering tensions triggered by President Trump's far-reaching tariffs during an economic summit in this small ski town.
At the close of the three-day meeting, the Group of Seven finance and central bank chiefs issued a vague joint statement that offered few details about what was discussed at the meetings and the commitments countries were prepared to make on trade. The joint statement mentioned the word 'trade" once and made no mention of tariffs, despite the topic being a focal point in private discussions at the conference.
'We are committed to working together to achieve a balanced and growth-oriented macroeconomic policy mix that supports our economic security and resilience and ensures that all of our citizens can benefit from that growth," the joint statement said. 'We acknowledge that economic policy uncertainty has declined from its peak, and we will work together to achieve further progress."
The meeting featured U.S. Treasury Secretary Scott Bessent and finance officials representing Canada, France, Germany, Italy, Japan and the U.K., as well as those from the European Union.
Canada was hit with 25% tariffs on its steel, aluminum, assembled vehicles and other goods not compliant with the U.S.-Mexico-Canada trade pact. Imports from Europe, meanwhile, face an across-the-board 10% tariff and a heftier 25% levy on its cars, steel and aluminum.
Behind closed doors, the G-7 finance officials discussed working together to counter the effect of what the U.S. has called China's unfair trade practices, according to a U.S. official.
One option that has been discussed privately by Bessent and other U.S. officials is a 'unified tariff policy," in which American allies would work to impose a new joint trade policy on China to increase pressure on Beijing, the U.S. official said. The nascent idea is still being considered by Trump administration officials and wasn't discussed during the summit, the official said.
A Treasury Department spokeswoman declined to comment on the idea of a unified tariff policy.
In a briefing with reporters, Canadian Finance Minister François-Philippe Champagne declined to offer specifics on how the G-7 intends to address global trade imbalances, especially related to China. He said the inclusion of a reference to trade imbalances in the joint statement and the G-7's commitment to joint action 'sends a strong signal."
​As for the scant references to trade in the joint statement, which is often referred to as a communiqué, Champagne said, 'The choice of words in a communiqué is an art. What matters is that we came out with a common position." He called the document 'focused and action-oriented."
A European official in attendance for the summit told The Wall Street Journal that many of the G-7 officials scheduled time to talk to Bessent about the tariffs.
While talks were largely cordial, the EU privately pushed for stronger language in the final G-7 statement to reflect the negative impact that U.S. trade policy is having on the global economy, according to Valdis Dombrovskis, the EU's commissioner for economy and productivity.
Christine Lagarde, president of the European Central Bank, and Kazuo Ueda, governor of the Bank of Japan, during a working lunch at the G-7 meeting in Banff, Canada.
This week's summit came after the U.S. imposed tariffs on a range of nations, only to later pare some of them back. Bessent and his U.S. team recently agreed in private meetings in Switzerland with their Chinese counterparts to reduce baseline tariffs on China from 145% to 30%.
The U.S. official told The Wall Street Journal that the talks on trade were 'convivial." The official was surprised at the constructiveness of the conversations after tense meetings between Bessent and world leaders about the tariffs in Washington in April during the World Bank Group and International Monetary Fund spring gathering.
Bessent privately encouraged EU officials to significantly pare back and work to remove digital-services tax levied by some European countries if there is to be expeditious trade deals with the U.S., the U.S. official said. France, Italy and the U.K. each have such a tax on revenue earned by foreign technology companies selling services in the countries. The U.S. has criticized the taxes, arguing they amount to unfair trade practices.
Bessent told EU officials they have a 'collective action problem," warning that progress on reaching a trade deal with Europe has slowed because each nation has different priorities for an agreement.
Canada also has a digital-services tax, and that levy is a source of contention between Washington and Ottawa dating back to the Biden administration. In February, the White House declared that Canada's digital levy is an unfair trade practice that could lead to stiffer U.S. tariffs.
The war between Ukraine and Russia was also a central topic at the G-7 finance summit.
Bessent privately told European officials that the U.S. is willing to increase sanctions on Russia to pressure President Vladimir Putin to come to the negotiating table with Ukraine, according to the U.S. official. Ukraine's finance minister Sergii Marchenko was in Banff for the G-7 finance meeting.
At the meetings, G-7 representatives agreed that new sanctions against Russia must be on the table, including sanctions targeting Russia's energy industry, according to U.S. and European officials.
Any U.S. sanctions on Russia would have to be approved by Trump, who has threatened to impose new sanctions, but hasn't yet taken action. Trump told reporters on Monday that he might 'back away" from negotiations if they don't make progress.
Write to Brian Schwartz at [e-mail] and Paul Vieira at [e-mail]