G7 finance ministers issued a statement yesterday (22 May) that has been widely interpreted as criticising Chinese trade practices, while avoiding the issue of US tariffs, ahead of a wider summit later in the year.
The finance officials issued a statement after three days of discussions in the Canadian city of Banff that promised to address “excessive imbalances” in the global economy.
The language appears to echo US president Donald Trump’s rhetoric against justifying his sweeping global tariffs.
Despite the emphasis on addressing practices that destabilise economic security, mention of tariffs was notably absent from the final statement.
Canadian finance minister Francois-Philippe Champagne told assembled press at the gathering that:
“We found common ground on the most pressing global issues that we face.
“I think it sends a very clear signal to the world... that the G7 is united in purpose and in action.”
China criticism
The communique included references to how “non-market policies and practices” undermine international economic stability and called for fairer practices:
“We agree on the importance of a level playing field and taking a broadly coordinated approach to address the harm caused by those who do not abide by the same rules and lack transparency”.
Chinese state subsidies that bolster domestic industries have been found to breach World Trade Organization (WTO) rules.
Multiple nations have launched investigations and raised disputes at the WTO, as their own domestic industries struggle to compete with cheaper Chinese goods.
De minimis
In another potentially veiled attack on China, the communique also highlighted the increase in shipments of low-value goods trade that falls under the ‘de minimis’ threshold, that therefore do not attract import duties.
Reduced scrutiny of these goods makes them a vulnerable channel for shipping illicit substances, according to the communique.
Chinese e-commerce firms Temu and Shein, which have grown significantly in recent years, have relied on the tax exemptions afforded by de minimis rules to support their business model of large-scale shipments of low-value packages worldwide.
Research from the Internation Post Corporation conducted in 31 countries found that China’s share of online commerce rose 7% in 2023 and a further 3% in 2024, following years of decline, driven largely by the two firms.
The US ended its own US$800 de minimis exemption for low-value parcels from China this month, although as part of its détente with China on tariffs it lowered the rate charged on direct-to-consumer parcels to 54%, down from 120%, while low-value shipments face a 30% duty.
The Trump administration’s decision has been challenged in US federal court, according to a statement from law firm Sandler, Travis & Rosenberg.
Tariff omission
Despite the commitment to addressing the “most pressing global issues”, the statement did not make reference to US tariffs, which are slated to hit global GDP growth in 2025.
The National Institute of Economic and Social Research wrote in early May that 2025 is set to be the worst year for global growth in the 21st century, excluding 2009 (global financial crisis) and 2020 (Covid 19 pandemic).
Champagne still said that ministers were not “skating around” the issue of tariffs.
“We’re trying to enhance growth and stability. And obviously tariffs are something in that context that you can’t avoid discussing”.
US treasury secretary, Scott Bessent, told AFP that he thought the meeting went well:
“I don’t think there were any major disagreements, I thought the meeting went great”.
The White House confirmed yesterday that US president Donald Trump will attend the June summit, which will also take place in Canada on 15-17 June.
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