G7 Finance Leaders Seek Common Ground Amid Tariff Tensions
By Julia Payne, Christian Kraemer, and Promit Mukherjee
BANFF, Alberta — Finance officials from the G7 nations aimed to minimize conflicts arising from U.S. President Donald Trump’s tariff policies and seek areas of agreement to maintain the relevance of the forum during their meeting in the Canadian Rockies on Wednesday.
The G7 finance ministers offered an optimistic outlook on their talks in Banff, Alberta, aiming to draft a unified statement primarily focused on non-tariff matters. Their conversations encompassed backing Ukraine, addressing the risks posed by state-driven economic policies such as those seen in China, along with efforts to tackle financial crimes and illegal drug trade.
“I enjoyed a highly fruitful day,” said U.S. Treasury Secretary Scott Bessent to journalists when questioned about his one-on-one discussions during his exit towards an elevated location for a dinner with other G7 ministers and central bank governors.
The financial chiefs aimed to prevent a recurrence of the divided G7 finance meeting held in Canada in 2018, where Trump’s initial term tariffs on steel and aluminum rendered a unified declaration unachievable.
The meeting, referred to as the “G6 plus one,” concluded with Canada, Japan, Germany, France, Britain, and Italy voicing their “collective worry and dissatisfaction” regarding Trump’s tariff decisions.
Trump’s tariffs are far more extensive this time, but G7 sources said there was an effort to find compromise with Bessent.
A noticeable enhancement has occurred in the atmosphere,” stated a representative of French Finance Minister Eric Lombard following his one-on-one meeting with Bessent. “Both parties engaged in an open and truthful dialogue as allies.
Previously, Lombard mentioned that he would be open to not having a joint statement as long as the G7 could achieve a clearer consensus on decreasing trade disparities, improving economic growth strategies, and addressing the conflict in Ukraine.
“Ultimately, what truly counts is making progress. It’s not merely about endorsing a declaration today without purpose,” Lombard stated.
However, Italian Economy and Finance Minister Giancarlo Giorgetti adopted a different stance, stating on X that achieving a communique agreement was “a critical step we view as essential.”
UKRAINE DISCORD
Sources within the G7 delegations stated that it was still uncertain whether the leaders would be able to reach an agreement on the wording of their joint statement. A representative from Europe mentioned specifically that U.S. officials were pushing to remove the term “illegal” when referring to Russia’s invasion of Ukraine in the document under discussion.
Giorgetti mentioned that Italy is advocating for a plan to prevent nations that have engaged in transactions supporting Russia’s military campaign from participating in rebuilding Ukraine. This notion mirrors what Bessent stated earlier, indicating that “those who funded or provided resources to the Russian war machinery won’t 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 also considering potentially reducing the G7 price cap on Russian crude oil from its current level at $60 per barrel.
One of the officials stated that we anticipate a challenging debate regarding the price ceiling.
The European Union is working towards reducing the price levels as it develops its 18th round of sanctions targeting Russia. These measures focus specifically on Russian energy and efforts to evade current sanctions.
A European official stated, ‘There is still no consensus on the communiqué, but achieving an agreement on it is crucial. Its failure to be approved would be quite serious.’
CALMING INFLUENCE
A second European authority figure mentioned that Bessent’s involvement in the G7 meeting and his attempts to seek shared positions offered reassurance to those present, characterizing him as “adaptable.”
Bessent missed a larger financial gathering of the G20 nations held in South Africa back in February. Furthermore, an awkward interaction at the White House between Trump and South African President Cyril Ramaphosa sparked additional doubts regarding Trump’s attendance at the upcoming G20 leaders summit scheduled for November.
A source familiar with Bessent’s stances reported on Monday that the United States would refuse to endorse a joint declaration unless it aligned with American objectives. These goals encompass more robust actions from the G7 aimed at addressing non-market policies like those implemented by China—specifically, subsidy programs resulting in surplus production capabilities.
“The communication we’re relaying to Bessent is that tariffs are not an appropriate solution for addressing global imbalances,” stated another European official.
During a two-party meeting, Bessent and Japan’s Finance Minister Katsunobu Kato concurred that the present dollar-yen exchange rate aligns with economic basics, according to a Treasury statement. The statement also noted that they refrained from discussing particular currency values.
Exchange rates are a consideration in Japan’s attempt to secure a tariff-lowering trade agreement with the United States.
Canada’s Finance Minister, Francois-Philippe Champagne, informed journalists that he had a productive discussion with Bessent.
Irven Stewart Champagne mentioned that we get along really well, though he didn’t want to go into more detail.
On Wednesday, Bessent also had a meeting with Germany’s newly appointed Finance Minister Lars Klingbeil.
A source from Germany at the G7 gathering characterized the conversation as an open and productive exchange that went beyond the scheduled time, with both parties agreeing to reconvene in Washington following Bessent’s invitation.
Japan, Germany, France, and Italy could each see potential U.S. duties double to 20% or higher come early July. The United Kingdom secured a restricted trade agreement resulting in 10% U.S. tariffs on most products, whereas host country Canada continues to grapple with President Trump’s individual imposition of a 25% tariff on numerous Canadian exports.
(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, Sonali Paul, and Saad Sayeed)