BANFF, May 22 — Finance leaders from the Group of Seven (G7) industrialised democracies sought to downplay disputes over United States (US) President Donald Trump's tariffs and find some common ground to keep the forum viable as they met in the Canadian Rocky Mountains on Wednesday.
G7 finance ministers put a positive spin on discussions in Banff, Alberta, to try to reach an agreement on a joint communique broadly covering non-tariff issues. The discussions included support for Ukraine, the threat from non-market economic policies of countries, including China, and combating financial crimes and drug trafficking.
"I had a very productive day," US Treasury Secretary Scott Bessent told the press when asked about his bilateral meetings as he departed the venue for a mountaintop dinner with fellow G7 ministers and central bank governors.
The finance leaders were striving to avoid a repeat of a fractured G7 finance meeting hosted by Canada in 2018, when Trump's first-term steel and aluminium tariffs made a joint statement impossible.
That meeting, described as the "G6 plus one," ended with Canada, Japan, Germany, France, the United Kingdom, and Italy expressing "unanimous concern and disappointment" over Trump's tariffs.
The tariffs are far more extensive this time, but G7 sources said there was an effort to find compromise with Bessent.
"There has been a marked improvement in the mood. We had a sincere and honest discussion between allies," said a spokesperson for French Finance Minister Eric Lombard after his bilateral meeting with Bessent.
Earlier, Lombard said he was willing to live without a joint statement as long as the G7 reached a better understanding of how to reduce trade imbalances, better growth policies, and the war in Ukraine.
"And making progress is what matters ultimately. It is not just a question of agreeing on a statement today for the sake of it," he said.
But Italian Economy and Finance Minister Giancarlo Giorgetti took a different tack, saying on X (formerly Twitter) that reaching a communique compromise was "a step we consider crucial."
[caption id="attachment_401745" align="aligncenter" width="1194"]
G7 finance ministers and central bank governors sit down for their first meeting at the G7 Finance Ministers and Central Bank Governors’ Meeting in Banff, Alberta, Canada, on May 21, 2025. — Picture by REUTERS[/caption]
Ukraine discord
G7 delegation sources said whether the leaders could agree on joint communique language remained unclear. One European source said, for example, that US officials wanted to delete language describing Russia's invasion of Ukraine as "illegal" from the draft.
Giorgetti said that Italy is pushing a proposal to bar countries that have done business in support of Russia's war effort from participating in Ukraine's reconstruction. The idea echoes Bessent's statement last month that "no one who financed or supplied the Russian war machine will be eligible for funds earmarked for Ukraine’s reconstruction."
China has been key in helping Russia circumvent Western sanctions and has served as a conduit of high-tech and battlefield goods like drone components.
Delegates also discussed possibly lowering the US$60-a-barrel G7 price cap on Russian crude oil.
"We expect a thorny discussion on the price cap," one of the officials said.
The European Union is pushing to lower the price level as it works on an 18th package of sanctions against Russia aimed at Russian energy and the financing of sanctions circumvention.
"There is no agreement yet on the communique, but it is fundamental that we get this communique. It would be serious if not agreed," a European official said.
[caption id="attachment_401746" align="aligncenter" width="1330"]
G7 finance ministers and central bank governors sit down for their first meeting at the G7 Finance Ministers and Central Bank Governors’ Meeting in Banff, Alberta, Canada, on May 21, 2025. — Picture by REUTERS[/caption]
Calming influence
A second European official said Bessent's participation in the G7 meeting and efforts to find common ground provided some comfort to participants, describing him as "flexible."
Bessent skipped a much broader G20 finance meeting in South Africa in February, and a testy White House exchange between Trump and South African President Cyril Ramaphosa raised more questions about Trump's participation in a November G20 leaders summit.
On Monday, a US source briefed on Bessent's positions said that Washington would not agree to a joint statement unless it served US priorities, which include stronger G7 steps to combat non-market practices including China's subsidies that have led to excess manufacturing capacity.
"The message we are passing on to Bessent is that tariffs are not the correct response to dealing with global imbalances," another European official said.
In a statement, the US Treasury said that in a bilateral meeting, Bessent and Japanese Finance Minister Katsunobu Kato agreed that the current dollar-yen exchange rate reflects fundamentals. Both did not discuss specific currency levels.
Currency issues are a factor in Japan's effort to negotiate a tariff-reducing trade deal with the US.
Canadian Finance Minister Francois-Philippe Champagne told the press that he had a good meeting with Bessent.
"We get along very well. We got along very well," he said, declining to provide specifics.
Bessent also met with Germany's new Finance Minister Lars Klingbeil on Wednesday.
A German source at the G7 meeting described the discussion as an open and constructive exchange that lasted longer than planned, and the two men agreed to meet again in Washington after Bessent extended an invitation.
Japan, Germany, France, and Italy all face a potential doubling of US duties to 20 per cent or more in early July. Britain negotiated a limited trade deal that leaves it saddled with 10 per cent US tariffs on most goods, and host Canada is still struggling with Trump's separate 25 per cent duty on many exports.
— Reuters
