The G7 finance ministers and central bank governors gathered in Banff, Canada on Wednesday (May 21) for the annual G7 finance ministers meeting. Amid US President Trump’s push for a new round of tariff policies, countries present at the meeting are working to downplay differences and focus on non-tariff issues to maintain economic consensus and avoid a repeat of the “G6+1” scenario caused by the 2018 tariff disputes.
Officials at the meeting indicated that while the G7 members have not yet reached a common position on policies towards Russia, countries are actively coordinating in hopes of issuing a joint statement at this meeting. The statement is expected to cover various non-tariff issues, demonstrating the willingness of G7 countries to cooperate in the face of significant geopolitical and economic challenges. The meeting is also laying the groundwork for the G7 summit in June.
During the meeting, countries aim to avoid a repeat of the awkward “G6+1” scenario from 2018 when President Trump imposed tariffs on steel and aluminum, preventing a joint statement from being released.
Despite the broader scope of the tariff measures introduced by the Trump administration this time, many G7 ministers are leaning towards focusing on broader economic and trade principles and policy dialogues.
The draft joint statement is expected to focus on non-tariff issues, including three core goals: strengthening financial and institutional support for Ukraine, countering non-market economic policies including those of China, and collaborating to combat cross-border financial crimes and drug trafficking.
Italian finance minister Giancarlo Giorgetti stated on social media that reaching a joint statement is a “crucial step”.
French finance minister Eric Lombard pointed out, “This G7 meeting has facilitated our consistency in supporting Ukraine, reducing global imbalances, and promoting economic growth policies. Progress itself is the most important.”
This meeting is also the first official attendance of US Treasury Secretary Scott Bessent at a G7 finance ministers meeting.
He briefly participated in a G7 meeting on the sidelines of the International Monetary Fund and World Bank meetings held in Washington last month. European officials described Bessent’s performance in Banff as “open and not rigid,” attempting to seek compromise and being described as someone within the Trump administration with a more flexible stance on tariff issues.
Washington emphasizes that the fundamental goal of the current tariff policy is to correct “global trade imbalances”, primarily targeting China’s long-standing subsidy and capacity policies.
Sources noted that while many finance ministers will engage in bilateral dialogues with Bessent, reaching a consensus on any trade agreement in the short term is unlikely. The focus of this meeting is on paving the way for the G7 summit in June.
On Wednesday, Bessent also met with French Finance Minister Lombard, Canadian Finance Minister Francois-Philippe Champagne, and had his first meeting with Germany’s new Finance Minister Lars Klingbeil. According to German sources, the atmosphere of the meeting was open, constructive, and longer than scheduled, with plans for future meetings in Washington.
The Ukraine issue is a major focus of this meeting. According to Reuters, European representatives stated that the US hopes to remove the language describing Russia’s invasion of Ukraine as “illegal” from the draft joint statement, which raises uncertainty about whether the joint communiqué will be released as scheduled.
Giorgetti stated that Italy is pushing a proposal to exclude any countries from participating in Ukraine’s reconstruction that have assisted Russian military actions. This proposal aligns with Bessent’s remarks last month when he stated, “Any individuals or entities supporting the Russian military war machine should not receive specific aid for Ukraine’s rebuilding.”
China is seen as an important accomplice for Russia to bypass Western sanctions, with US officials noting that Russia has imported sensitive dual-use goods worth billions of dollars from Chinese suppliers. If the proposal is implemented, it could potentially exclude Chinese companies from participating in Ukraine’s reconstruction projects.
Although Ukraine is not a G7 member, Ukrainian Finance Minister Sergii Marchenko was invited to attend this G7 meeting, as reported by the Associated Press.
Representatives from attending countries will also discuss whether to further lower the barrel price cap of $60 for Russian crude oil as part of strengthening sanctions.
Daleep Singh, an economist at PGIM and former Deputy National Security Advisor during the Biden administration, stated that the issue of Russian oil sanctions will be a key indicator of G7 solidarity.
“If we want to achieve a just and enduring peace, oil sanctions are the best entry point,” he said.