G7 pushes action on trade imbalances amid divisions over Russia sanctions

G7 finance ministers and central bank governors met in Paris to discuss urgent economic challenges, including trade imbalances and disruptions caused by the US-Israeli war on Iran. They warned that current imbalances—such as China’s under-consumption, US over-consumption, and Europe’s under-investment—were unsustainable and threatened global growth and inflation. The group also emphasized the need for a swift return to free shipping through the Strait of Hormuz, disrupted by Iran’s blockade. French Finance Minister Roland Lescure described the talks as 'frank, sometimes difficult,' highlighting the urgency of both short-term and long-term solutions. The G7 reaffirmed its commitment to multilateral cooperation but acknowledged growing uncertainty due to geopolitical tensions and market volatility. A key point of contention was the US decision to extend a temporary waiver on sanctions covering Russian oil stored at sea. US Treasury Secretary Scott Bessent defended the move as necessary to stabilize global crude markets, while EU Economy Commissioner Valdis Dombrovskis criticized it, arguing that easing pressure on Moscow could benefit Russia amid rising fossil fuel prices linked to the Iran conflict. European officials expressed concern that the waiver had already exceeded its original timeline, deepening divisions within the G7. The Paris meeting took place under France’s rotating presidency, ahead of a scheduled leaders’ summit next month. The joint communiqué stressed that 'multiple and complex global challenges' required coordinated responses, with ministers warning of increasing risks to global economic stability.