Top finance officials from the world’s wealthiest economies convened in Paris on Monday to devise a plan to contain the economic fallout from the war in Iran, which has sent global energy prices soaring and dragged down growth.
The meetings come at a fraught moment for the world economy and for the United States (US). After more than a year of imposing tariffs on its Western allies and threatening more, President Donald Trump now needs the assistance of fellow members of the Group of Seven (G7) nations to stabilise an economic crisis of its own making.
During the two-day gathering, the finance ministers are also expected to discuss sanctions policy, illicit finance and the future of support for Ukraine.
The summit comes days after Trump met in Beijing with Chinese President Xi Jinping to discuss ways to deepen ties between the world’s largest economies. Although Trump prefers to engage in bilateral negotiations, the challenge of dealing with Iran and confronting China’s control of critical minerals has forced the US to lean on its traditional allies.
That could prove difficult given that Trump has spent much of his second term criticising and threatening America’s closest allies, including Europe and Canada.
“I think there’s one lesson to be taken from the last six months, which is that the law of the fittest doesn’t work,” Roland Lescure, France’s finance minister, said in an interview with The New York Times ahead of the meetings.
Lescure added that negotiations to reopen the Strait of Hormuz have required international cooperation and that China’s export restrictions on minerals have called for a global response.
“When we saw that, we felt that more than ever the G7 had a role to play, and that engaging in conversations, multilateral if possible, was the right way of addressing this,” Lescure said.
The US delegation is being led by Treasury Secretary Scott Bessent, who travelled with Trump to Beijing. In addition to the usual G7 participants, representatives from India, South Korea, Brazil and Kenya are also attending.
Before the meetings in China last week, Bessent visited Japan and South Korea. He expressed concern about the weakness of the yen in Japan and, in both countries, held discussions about critical minerals and investment in the US.
As the meetings started on Monday, Bessent urged his counterparts to work together to strangle Iran’s economy.
“We call upon all our G7 and indeed all of our allies and the rest of the world to follow the sanctions regime, so that we can crack down on the illicit finance that is fuelling the Iranian war machine, and get this money back to the Iranian people,” Bessent said.
The global economy has been resilient in the face of the pandemic and Russia’s war in Ukraine. However, the International Monetary Fund (IMF) warned last month that disruptions to oil markets could slow growth, fuel inflation and raise the possibility of a global recession.
While the finance ministers gathered, concern was increasing over a global bond market sell-off that has been fuelled by fears that higher energy prices will lead to a fresh bout of inflation.
“When oil prices hover above $100 and there is already impact of this war baked in, inevitably there would be a response,” IMF Managing Director Kristalina Georgieva said on Monday.
Georgieva said policymakers needed to monitor inflation carefully to ensure that they “don’t put in place measures that would make the situation worse”.
At recent G7 gatherings, US tariffs have driven a wedge between Washington and its allies. Trump’s import duties continue to be a contentious issue this year.
“That’s not gone away,” said Josh Lipsky, head of international economics at the Atlantic Council. “So it’s hard to talk about cooperation with Iran economically when you have this hanging over their heads.”
Lescure said the meetings would include discussions about how to increase support for Ukraine, whose finance minister is attending, and about the future of Western sanctions on Russia.
“We need to have a conversation to make sure that we all agree on one, Ukraine needs to be supported, and two, Russia shouldn’t be a winner of that conflict,” Lescure said.
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