G7 Finance Leaders Strive for Consensus Amid Tariff Tensions
By Julia Payne and Christian Kraemer
BANFF, Alberta — Finance ministers from the G7 nations attempted on Wednesday to minimize conflicts arising from U.S. President Donald Trump’s imposition of tariffs. They aimed to identify shared objectives to ensure the sustainability of the forum during their gathering in the Canadian Rockies.
The participants mentioned that the G7 finance ministers and central bank governors aimed to release a collective statement addressing non-tariff matters such as backing Ukraine, countering non-market economy practices from nations like China, along with tackling financial crimes and drug trafficking.
During the gathering in Banff, Alberta, the financial authorities aim to prevent a division within the G7 akin to what happened when Canada last hosted the group back in 2018 during President Trump’s inaugural term. At that time, his introductory tariffs on steel and aluminum prevented them from reaching an agreement for a collective statement.
The meeting, referred to as the “G6 plus one,” concluded with Canada, Japan, Germany, France, Britain, and Italy voicing “collective worry and dissatisfaction” regarding Trump’s tariff decisions.
Trump’s tariffs are much broader this time around; however, according to G7 sources, efforts were made to reach a middle ground with Treasury Secretary Scott Muenchner.
“Italy remains committed to ensuring that a final compromise communiqué can be achieved. We view this as a critical step,” stated Italian Economy and Finance Minister Giancarlo Giorgetti in a social media post.
Other ministers were more inclined to proceed without a collective statement provided that the group achieved a clearer mutual comprehension regarding trade disparities.
At this G7 gathering, we made headway towards greater consensus on backing Ukraine, tackling worldwide economic disparities, and implementing strategies for growth,” stated French Finance Minister Eric Lombard, who also plans to hold a one-on-one discussion with Bessent. “Ultimately, what truly counts is moving forward. It’s not merely about reaching an agreement today without purpose.
UKRAINE DISCORD
However, according to sources within the G7 delegation, it was still uncertain whether the leaders would reach an agreement on the wording of the joint statement. A representative from Europe mentioned that, for instance, U.S. officials were pushing to remove the term “illegal” when referring to Russia’s attack on Ukraine in the proposed document.
Giorgetti stated that Italy is advocating for a measure to prevent nations that have engaged economically with support of Russia’s military campaign from participating in rebuilding Ukraine. This mirrors what Bessent mentioned earlier, asserting that “those who funded or provided resources to the Russian war machinery will not qualify for funds designated for reconstructing Ukraine.”
China has played a crucial role in assisting Russia in evading Western sanctions and has acted as a channel for advanced technology and military supplies like drone parts.
The delegates were debating a potential reduction in the G7 price ceiling for Russian crude oil, which is currently set at $60 per barrel.
One of the officials stated that we anticipate a challenging debate regarding the price ceiling.
The European Union is aiming to reduce prices as it develops its 18th round of sanctions against Russia. These new measures focus on Russian energy and efforts to evade current sanctions.
A European official stated that there is still no consensus on the communiqué, but achieving an agreement on it is crucial. The situation would be concerning if they fail to reach one,” adding “ultimately, we represent just seven nations.”
CALMING INFLUENCE
A second European official mentioned that Bessent’s involvement in the discussion and his attempts to seek mutual understanding brought some reassurance to the team, characterizing him as “open-minded.”
“During yesterday’s dinner, Bessent was quite forthcoming and flexible. He discussed seeking a resolution,” the official mentioned additionally.
A representative from the U.S. Treasury refused to comment on the discussions within the G7.
A U.S. source briefed on Bessent’s positions said on Monday that Washington would not agree to a joint statement unless it served U.S. priorities, which include stronger G7 steps to combat non-market practices such as China’s subsidies that have led to excess manufacturing capacity.
“The communication we’re sending to Bessent is that tariffs are not an appropriate solution for addressing global imbalances,” stated another European official.
Meanwhile, Bessent was engaging in bilateral talks with her G7 peers when she concurred with Japan’s Finance Minister Katsunobu Kato about the alignment of the current dollar-yen exchange rate with economic realities. This information comes from an official statement released by the U.S. Treasury which also noted that discussions regarding particular currency targets were off the table.
Japan aims to discuss a trade agreement with the U.S. focused on lowering tariffs.
On Wednesday, Bessent met with France’s Lombard and Canada’s Finance Minister François-Phillippe Champagne following an initial discussion with Germany’s newly appointed Finance Minister Lars Klingbeil earlier that day.
A source from Germany at the G7 gathering characterized the conversation as an open and productive discussion that went beyond the scheduled time, with both individuals agreeing to reconvene in Washington following Bessent’s invitation.
Japan, Germany, France, and Italy could each see U.S. duties potentially rise to 20% or higher come early July. The United Kingdom managed to secure a partial trade agreement resulting in 10% U.S. tariffs on most products, whereas host country Canada continues to grapple with distinct 25% levies imposed by President Trump on numerous exported items.
(Reported by Julia Payne and Christian Kraemer; additional reporting by David Lawder, Promit Mukherjee, and Makiko Yamazaki; written by David Lawder; edited by Rod Nickel and Sonali Paul)