This week, from Tuesday (May 20th) to Thursday (May 22nd), the G7 finance ministers and central bank governors will hold a meeting in Banff, in the Canadian Rockies. One of the key topics of discussion will be the global tariffs pushed by U.S. President Trump.
U.S. Treasury Secretary Scott Bessent will be attending the meeting. According to Reuters, a spokesperson for the U.S. Treasury Department stated on Sunday (May 18th) that Bessent will seek to have the G7 “return to basics, focusing on addressing trade imbalances and non-market behavior issues among G7 and non-G7 countries.”
As a former hedge fund manager, Bessent has consistently advocated against China’s state-led, export-driven economic model, believing that its overcapacity and subsidized goods are impacting the market economy.
Bessent is seen as a moderate force behind Trump’s trade agenda. Mark Sobel, former U.S. Treasury and International Monetary Fund official and OMFIF U.S. Chair, mentioned that the G7 finance ministers will encourage him to promote a more moderate trade policy.
During CNN’s “State of the Union with Jake Tapper” program on Sunday, Bessent stated that if countries fail to reach a trade agreement with the U.S. within the 90-day suspension period, tariffs will quickly revert back to “equivalent” levels.
G7 member countries Japan, Germany, France, and Italy are all facing the risk of the U.S. potentially doubling their equivalent tariffs to 20% or higher starting in early July.
The UK has already reached a limited trade agreement with the U.S. through negotiations, with the U.S. imposing a 10% tariff on most of its goods.
Meanwhile, the host country Canada is grappling with the challenge of Trump imposing a separate 25% tariff on many of its exported goods.
Currently, Bessent is leading negotiations with Japan, and according to government officials, talks between the U.S. and Japan have reached an advanced stage. Bessent mentioned on Sunday that countries not negotiating in good faith will face higher equivalent tariffs imposed by Trump on April 2nd, such as Japan potentially facing a 24% tariff.
Apart from tariffs, this week’s meeting will also discuss aspects such as economic security, support for Ukraine, and cooperation on artificial intelligence.
Chris Turner, Global Head of Markets and Research for the UK and Central Eastern Europe at ING Group, anticipates that the meeting will conclude by issuing a joint statement.
According to Reuters, based on information from sources, a draft of the joint communique is ready, with the host country Canada striving to reach a consensus to demonstrate the unity of the G7 countries on various issues and lay the groundwork for the G7 Leaders’ Summit scheduled for June in the nearby Kananaskis mountain area.