Finance ministers from the G7 group of advanced economies were unanimous on the need to take on global trade imbalances, according to the statement released Tuesday following a second day of Paris talks. But the US decision to extend a waiver on sanctions against Russia in the wake of the US-Israeli war on Iran shows the group remains divided.
G7 finance ministers agreed on Tuesday on the need for action to tackle trade imbalances in a fragmented global economy, saying the current situation was unsustainable, but were light on plans for concrete measures.
Finance ministers and central bank governors from the G7 group of advanced economies met in Paris for a second day of talks to discuss the economic fallout from the US-Israeli war on Iran and volatility on global bond markets.
Watch moreG7 finance ministers meet in Paris as headwinds mount for global economy
The group vowed multilateral cooperation to address mounting challenges to economic stability due to the Middle East war.
The meeting also comes as European nations fret over the tariff blitz from the US administration under President Donald Trump and fears of a softening line on Russia.
"We have had frank, sometimes difficult, direct discussions to find long-term and short-term solutions to major global economic challenges in order to guarantee economic stability," French Finance Minister Roland Lescure said after the meeting attended by US Treasury Secretary Scott Bessent.
But the final communiqué of the G7 ministers and central bank governors reaffirmed "our commitment to multilateral cooperation in addressing risks to the global economy".
The statement highlighted "multiple and complex global challenges requiring coordinated responses".
"Economic uncertainty has heightened risks to growth and to inflation, amid the ongoing conflict," it said.
'Considerable progress'
The statement singled out "pressures on energy, food, and fertilisers supply chains, which particularly affect the most vulnerable countries".
It urged a "swift return to free and safe transit" through the Strait of Hormuz, a key Gulf waterway where shipping remains severely restricted after Iran imposed an effective blockade at the start of the war.
The Paris meeting, held under France's rotating G7 presidency, prepares the ground for a summit in the French Alpine lakeside resort of Evian in June, chaired by President Emmanuel Macron, which should be attended by Trump.
In line with Macron's aim to broaden the relevance of the G7 club, which groups Canada, Germany, France, Italy, Japan, the UK and US, non-member nations Brazil, India, Kenya and South Korea were invited to the Paris meeting.
"I think we have made considerable progress in the work, so that our leaders can (in Evian), I hope at least, conclude it on such important, very concrete issues as critical minerals and the resolution of global imbalances," Lescure said.
He said such imbalances were fuelling trade friction and risked a turbulent unwinding in financial markets, highlighting a pattern whereby China under-consumes, the United States over-consumes and Europe under-invests.
"We all share a common view. Those imbalances are not sustainable," he said.
Under pressure
As concern grows over how to combat the surge in crude oil prices due to the war in the Middle East, the US unsettled allies by announcing a temporary extension of the suspension of sanctions on Russian oil stored at sea.
The "willingness to keep pressure on Russia was unanimous", Lescure insisted.
But before the second day of talks started, EU economy commissioner Valdis Dombrovskis denounced the latest US waiver of sanctions on Russian oil.
"From the EU point of view, we do not think that this is a time to ease pressure on Russia," Dombrovskis said.
"In fact, Russia is the one which is gaining from the war in Iran and the increase in fossil fuel prices," he said. "If anything, we would need to strengthen the pressure."
The announcement had been made by Washington after the first day of talks Monday, with Bessent saying on X the measure would "provide additional flexibility" and "help stabilise the physical crude market".
"Secretary Bessent was reassuring us that this is a temporary measure, but we know that it's already a second extension of the measure which initially was meant to last only 30 days," Dombrovskis said.
(FRANCE 24 with AFP and Reuters)
