Top finance officials from the world’s wealthiest economies will begin gathering in Canada on Tuesday for meetings that are expected to be consumed by renewed fears of a global downturn set off by President Trump’s trade war.
The summit of the Group of 7 finance ministers, a traditionally friendly gathering, is likely to be more fraught this year. The tariffs that Mr. Trump has imposed on American allies and adversaries have threatened to blunt global growth and inflame inflation. Europe, Japan and Canada have all been bearing the brunt of the Trump administration’s “America first” economic agenda.
The tenor of the discussions could also be complicated by recent tension between the United States and Canada, the country hosting this year’s meetings and one that Mr. Trump has said he wants to annex.
“I think it’s going to be awkward,” said Charles Lichfield, deputy director of the Atlantic Council’s GeoEconomics Center.
The three days of meetings will include many of the recent topics of discussion, including support for Ukraine, concerns about China’s economic practices and headwinds facing the global economy. However, Mr. Trump’s trade tactics, which many economists view as the biggest threat to global economic stability, will dominate the discussions between Treasury Secretary Scott Bessent and his counterparts.
Mr. Bessent, who skipped a gathering of the Group of 20 finance ministers in February, will appear at the international forum for the first time and at a particularly tenuous moment.
Mr. Bessent plans to make the case that countries need to get “back to basics” and take steps to address “imbalances and nonmarket practices,” according to a Treasury Department spokesman. Mr. Bessent is also expected to prioritize expressing the Trump administration’s concerns, which are widely shared among the Group of 7 nations, about China’s excess industrial capacity, according to a person briefed on the U.S. position. The Group of 7 is made up of the United States, Canada, Britain, France, Germany, Italy and Japan.
Since taking office, Mr. Trump has upended the global trading system with a blizzard of tariffs. He imposed a 10 percent universal tax on almost every trading partner, in addition to 25 percent tariffs on imported steel, aluminum, cars and car parts. He raised tariffs on China to a punishing 145 percent in April before reducing them to 30 percent this month in order to allow Beijing and Washington to negotiate a trade deal.
In April, Mr. Trump hit dozens of countries with “reciprocal” tariffs before pausing those levies for 90 days to allow for trade negotiations. Mr. Bessent and other Trump officials have said the administration is working to strike deals by July 8 with 18 to 24 trading partners, including Argentina, Malaysia, Israel, Switzerland, India, Japan, Vietnam, South Korea and Thailand.
The United States and the European Union have also been negotiating over trade terms, though tensions between the governments remain high.
On Sunday, Mr. Bessent warned that higher tariffs could kick in if negotiations with those nations faltered during the 90-day pause.
“I would expect that everyone would come and negotiate in good faith,” Mr. Bessent said on NBC’s “Meet the Press,” warning that countries that do not will get letters with new U.S. tariff rates.
The compacted time frame could result in trade deals that are quite modest, with countries perhaps agreeing to reduce tariffs on a few products and promising to collaborate in the future in other areas.
One model may be the agreement with Britain that the administration announced with great fanfare earlier this month. The deal was quite limited compared with traditional trade pacts. It opened British markets for American beef and ethanol and rolled back American tariffs on British steel and cars. The governments also pledged to discuss digital trade, economic security and other trade matters in the future. But the governments declined to say when the pact would go into effect, and it is not legally binding.
While these deals are being hammered out, trade with the United States feels deeply uncertain for many parts of the globe. Mr. Bessent said on CNN on Sunday that the United States was focused on completing agreements with a short list of partners, and that other parts of the world, like Central America or Africa, could see their tariff rates set through regional deals instead.
A person briefed on the U.S. preparations for the Group of 7 summit said it was unlikely that any additional deals would be announced this week.
Following a meeting between American and Chinese officials in Geneva earlier this month that both sides proclaimed a success, the U.S. and Chinese governments are also starting to communicate more frequently in an effort to make progress on their trade spats. But the countries have significant issues to surmount before higher tariffs are set to snap back into effect between them in early August.
Gene Seroka, the executive director at the Port of Los Angeles, who sits on a trade advisory council for the Trump administration, said at a news conference on Monday that the administration was working constructively toward framework deals. But he added that Mr. Trump had threatened the biggest levies since the Smoot-Hawley Tariff Act of 1930, and that those tariffs were significantly dampening international trade.
“It’s going to continue to be bumpy for a while,” he said.
The turbulence has echoes of Mr. Trump’s first term, when the steel and aluminum tariffs that he imposed in 2018 infuriated Western allies.
At the Group of 7 meeting of finance ministers in Canada that year, France’s finance minister at the time, Bruno Le Maire, said the club had become the Group of 7 plus one, with the United States on the outskirts.
Mr. Trump’s first-term Treasury secretary, Steven T. Mnuchin, was sent home from the gathering with a stern rebuke. In a joint statement that year, finance ministers from the European Union, Canada and Japan “requested that the United States secretary of the Treasury communicate their unanimous concern and disappointment.”
Mr. Bessent has tried to strike a pragmatic tone when dealing with foreign counterparts. In a speech last month on the sidelines of the spring meetings of the International Monetary Fund and the World Bank, Mr. Bessent maintained that the United States was not retreating from the global stage.
“America First does not mean America alone,” Mr. Bessent said. “To the contrary, it is a call for deeper collaboration and mutual respect among trade partners.”
However, many of America’s traditional allies and its largest trading partners remain on edge. Although Mr. Trump has demonstrated a willingness to walk back some of his trade measures, the scale and scope of the tariffs that he has already announced have dwarfed those from his first term.
“The big question facing the global economy is effectively a self-inflicted wound,” said Jay C. Shambaugh, who served as the Treasury under secretary for international affairs in the Biden administration. “The biggest thing everyone is worried about is to what extent is a tariff fight that we started going to disrupt the global economy.”
The dominance of the trade disputes could also overshadow many of the other matters that have been central to the Group of 7 meetings, like efforts to combat climate change, the rise of artificial intelligence and working together to address China’s manufacturing subsidies, which has led to a flood of cheap exports around the world. It is not clear the officials will be able to reach consensus on a joint statement, or communiqué, when the meetings conclude on Thursday.
“The trust, unity and cohesion that has bound the re-energized G7 of recent years is now gravely at risk,” said Mark Sobel, who served at the Treasury Department for nearly four decades.
Alan Rappeport is an economic policy reporter for The Times, based in Washington. He covers the Treasury Department and writes about taxes, trade and fiscal matters.
Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.
The post Global Economic Officials Gather Amid Headwinds From Trump’s Trade War appeared first on New York Times.
