G7 nations paper over differences on tariffs, Ukraine

BANFF, Alberta (AP):

Top finance officials from the world’s seven wealthiest democracies set aside stark differences on US tariffs after two days of talks and agreed to counter global “economic imbalances,” a swipe at China’s trade practices.

In a communiqué issued Thursday, the Group of Seven finance ministers and central bank governors, meeting in the Canadian Rockies, left out their traditional defense of free trade and toned down their references to Russia’s war in Ukraine, compared with last year. But they did agree that further sanctions on Russia could be imposed if the two countries don’t reach a ceasefire.

The communiqué said the G7 members would continue to monitor “nonmarket policies and practices” which contribute to imbalances in global trade. The statement did not mention China but nonmarket policies typically refer to that country’s export subsidies and currency policies that the Trump administration charges gives it an advantage in international trade.

Treasury Secretary Scott Bessent appears to have succeeded in steering the communiqué largely in the direction the Trump administration sought, particularly regarding China’s trade practices.

The high-profile gathering of officials from the United States, Canada, United Kingdom, Japan, Germany, France, and Italy also appeared to be more congenial than an earlier meeting of G7 foreign ministers in March. Yet that meeting, also in Canada, occurred as President Donald Trump was in the midst of threatening stiff tariffs on Canada and suggesting it could become the 51st state.

Canada is president of this year’s G7 and the sessions this week are intended to lay the groundwork for a meeting of the heads of state on June 15-17 in Kananaskis, Canada. The White House said Thursday that Trump will attend that gathering.

“Throughout our G7 presidency, the tone of the discussions has become progressively more constructive,” Tiff Macklem, governor of the Bank of Canada, said at a news conference at the conclusion of the summit.

Yet that unity appears to have been achieved by jettisoning many items that in the past had been agreed to by the G7 countries. In addition to leaving out any mention of trade, the communiqué dropped sections on combating climate change and cooperating on international tax policy, issues the Trump administration has dismissed.

“There will always be tension around tariffs,” said Francois-Philippe Champagne, Canada’s finance minister. “But there are also places where you find common ground. ... This year our focus was to return to the G7 core mission, restoring global growth and stability.”

The shift comes as Trump has slapped widespread tariffs on imports, including a 10% global duty on all goods, even those from the other G7 allies. Trump has also imposed 25 per cent tariffs on steel, aluminum, and cars, and on April 2 imposed much steeper tariffs on about 60 nations, which he then paused until early July.

‘DIFFICULT TOPIC’

Valdis Dombrovskis, European Union Trade Commissioner, said that trade was “obviously a difficult topic” during the negotiations. The EU, which participates in the G7 but doesn’t serve as one of the rotating presidents, pushed for stronger language that would have highlighted the economic harms from tariffs.

“The US administration is having a somewhat different view of the situation,” Dombrovskis told reporters. He added that details about US tariffs weren’t discussed because the G7 members are negotiating individually with the Trump administration about duties.

On Ukraine, the communiqué condemned “Russia’s continued brutal war against Ukraine,” yet that language was milder than last year’s, which referred to Russia’s “illegal, unjustifiable, and unprovoked full-scale invasion.” Trump officials in the past have pushed to avoid antagonizing Russia while seeking peace talks.

Champagne, however, called the invasion “illegal” in Thursday’s news conference.

Bessent also successfully included an agreement in the statement that “no country or entity” that supported Russia’s war efforts would be able to profit from Ukraine’s reconstruction, a restriction that would bar Chinese companies from participating.

Dombrovskis said the EU had proposed to lower the current price cap on Russian oil – previously agreed to as part of early sanctions slapped on Russia in the wake of its 2022 invasion – to US$50, from US$60, but the communiqué says little about specific measures.

Still, the EU was largely satisfied with the G7’s agreements on Ukraine, Dombrovskis said, including the willingness to impose more sanctions. The group also agreed to continue freezing Russia’s financial assets until they can be used to help pay for Ukraine’s reconstruction.