G7 to discuss global trade risks after US tariffs on China

Reading Time: 2 minutes

The Group of Seven (G7) major democracies meeting in Italy next week will discuss the risk of fragmentation in global trade after “very tough” tariffs imposed by the United States against China, Italian Economy Minister Giancarlo Giorgetti said.

Giorgetti was being interviewed for a conference in Milan on Tuesday organised by Italian newspaper La Verita.

Another item on the agenda for the meeting among the G7 finance ministers on May 24-25 in the northern Italian town of Stresa will be how to use frozen Russian assets seized after Moscow’s invasion of Ukraine, Giorgetti said.

US’ proposals to use the assets to directly fund Ukraine in the war would have “quite serious legal implications” which still need clarifying, said Giorgetti, who will host the Stresa meeting as Italy holds the rotating presidency of the G7.

“In Stresa we’ll reflect on … the fragmentation of global trade, with the latest moves by the American government which has shown its cards with very tough measures against China,” Giorgetti said.

“The world as we have known it is finishing,” he said, adding that “a trade war is underway which reflects geopolitical tensions” and Europe still needs to carve out its own role in the evolving scenario.

US tariffs on Chinese imports

US President Joe Biden on Tuesday unveiled a bundle of steep tariff increases on an array of Chinese imports including electric vehicle (EV) batteries, computer chips and medical products, risking an election-year standoff with Beijing in a bid to woo voters who give his economic policies low marks.

China immediately vowed retaliation. Its commerce ministry said Beijing was opposed to the US tariff hikes and would take measures to defend its interests, urging the United States to cancel the measures.

Biden will keep tariffs put in place by his Republican predecessor Donald Trump while ratcheting up others, including a quadrupling of EV duties to over 100% and doubling the duties on semiconductor tariffs to 50%, the White House said in a statement. It cited “unacceptable risks” to US economic security posed by what it considers unfair Chinese practices that are flooding global markets with cheap goods.