G7 draft warns of 'excessive imbalances' in global economy

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Finance ministers and central bank governors from the Group of Seven nations pledged to address “excessive imbalances” in the global economy, an effort clearly aimed at China, though a draft communique seen by Bloomberg News omitted the name of the country.

The officials said there was a need for a common understanding of how “non-market policies and practices” undermine international economic security. They said they agreed “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.”

The remarks were part of a final communique being prepared to summarize three days of meetings between officials from the G7 countries — the U.S., U.K., Canada, France, Germany, Italy and Japan — in Banff, Alberta.

The draft calls for an analysis of “market concentration and international supply chain resilience.”

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The statement also recognized an increase in so-called international low-value shipments, also referred to as “de minimis” packages, typically from Chinese retailers such as Temu and Shein. It said these shipments have the potential to overwhelm customs and tax collection systems and to be used for smuggling illicit material, including drugs.

The draft communique, however, glossed over the acrimony and deep disagreements between the allies over the Trump administration’s trade tariffs. A year ago in Italy, the group of finance chiefs reiterated a commitment to a “free, fair, and rules-based multilateral system,” but in Banff the pledge was diluted to “pursuing our shared policy objectives.”

The statement referred to concerns flagged by international organizations when the group last met in April over how policy uncertainty was weighing on growth, but played down how those risks have evolved.

“We acknowledge that economic policy uncertainty has declined from its peak, and we will work together to achieve further progress,” the draft said.

On Ukraine, the draft said the G7 nations will look at options to ramp up sanctions on Russia if a ceasefire is not reached, though it did not address specific measures like lowering the price cap on Russian oil. Some members of the bloc, including the UK, have been pushing to revisit the cap amid a lack of progress on the talks.

The draft condemns “Russia’s continued brutal war against Ukraine” and said the G7 “remains committed to unwavering support for Ukraine.” It did not include the word “illegal,” which has been used in previous communiques to describe the invasion and has been a divisive issue during the drafting between the Europeans and the U.S. A statement from the G7 foreign ministers issued earlier this year also omitted the word.

Russia’s sovereign assets located in G7 jurisdictions “will remain immobilized until Russia ends its aggression and pays for the damage it has caused Ukraine,” the draft said. It also included a section on working to rebuild Ukraine in the wake of the fighting there. Ukrainian Finance Minister Serhiy Marchenko attended the summit as a guest of the Canadian government and addressed the assembled officials during their meetings.