Top financial officials from the world’s richest economies met in Paris on Monday in hopes of devising a plan to stem the economic fallout from the war in Iran, which has pushed up global energy prices and slowed growth.
The meetings come at a difficult time for the global economy and the United States. After more than a year of imposing tariffs on its Western allies and threatening more tariffs, the Trump administration now needs the support of its Group of Seven counterparts to stabilize an economic crisis of its own making.
During the two-day meeting, finance ministers are also expected to discuss sanctions policy, illicit finance and the future of support for Ukraine.
The summit comes days after President Trump met in Beijing with China’s supreme leader Xi Jinping to discuss ways to deepen ties between the world’s largest economies. Although Mr. Trump prefers to engage in bilateral negotiations, the challenge of dealing with Iran and confronting China’s control over the world’s vital minerals has forced the United States to lean on its traditional allies. That will be a tricky task given that Mr. Trump spent much of his second term criticizing and threatening America’s closest allies, including Europe and Canada.
“I think there is a lesson to be learned from the last six months: the law of the strongest doesn’t work,” Roland Lescure, France’s finance minister, said in an interview with The New York Times before the meetings.
Mr. Lescure added that negotiations to reopen the Strait of Hormuz, which Iran has blocked since the war began, required international cooperation and that China’s mineral export restrictions required a global response.
“When we saw this, we knew that the G7 had a role to play more than ever and that starting talks, multilaterally if possible, was the right way to address this issue,” Mr Lescure said.
The US delegation is led by Treasury Secretary Scott Bessent, who traveled to Beijing with Mr Trump. In addition to the usual G7 participants, there are also representatives from India, South Korea, Brazil and Kenya.
Before meetings in China last week, Mr. Bessent visited Japan and South Korea. He expressed concern about the weakness of the yen in Japan and held discussions in both countries about critical minerals and investment in the United States.
As meetings began on Monday, Mr. Bessent urged his counterparts to work together to stall Iran’s economy.
“We call on all our G7 countries and of course all our allies and the rest of the world to adhere to the sanctions regime so that we can crack down on the illegal financing that fuels the Iranian war machine and return that money to the Iranian people,” Mr. Bessent said.
The global economy has proven resilient in the face of a pandemic and Russia’s war in Ukraine. But the International Monetary Fund warned last month that disruptions in oil markets due to the Middle East conflict could slow growth, fuel inflation and raise the possibility of a global recession.
As finance ministers met, concerns grew about a global bond market sell-off, fueled by fears that higher energy prices could lead to a new surge in inflation.
“If oil prices are above $100 and the effects of this war are already being felt, there will inevitably be a reaction,” Kristalina Georgieva, the managing director of the International Monetary Fund, said on Monday about bond market volatility.
Ms. Georgieva said policymakers needed to carefully monitor the inflation situation to ensure they “do not take actions that would worsen the situation.”
At recent G7 meetings, US tariffs have driven a wedge between Washington and its allies. Mr. Trump’s import tariffs remain a contentious issue this year.
“This hasn’t gone away,” said Josh Lipsky, director of international economics at the Atlantic Council. “That’s why it’s difficult to talk economically about cooperation with Iran when all this is in their heads.”
European Union officials paused their work on implementing a trade deal with the United States in February after the Supreme Court struck down Mr. Trump’s sweeping tariffs.
Earlier this month, Mr. Trump vented his frustration over the lack of progress and threatened to increase tariffs on European cars and trucks to 25 percent from the previously agreed 15 percent.
The United States gave the European Union until July to finalize the agreement, which European Commission President Ursula von der Leyen said on May 7 was making “good progress.”
Russia could also be a point of contention between Washington and the rest of the G7.
European nations were frustrated when the United States granted waivers from sanctions allowing the sale of some Russian oil to curb rising oil prices due to the Iran war.
The general license authorizing Russian oil sales was issued in March and extended in April until last Saturday. The Ministry of Finance allowed the exemption to expire briefly, but
Late Monday, Mr. Bessent announced another 30-day reprieve that would help the most vulnerable countries gain access to Russian oil currently at sea.
“This extension provides additional flexibility and we will work with these countries to provide specific licenses as needed,” Mr. Bessent said in a post on social media. “This general license will help stabilize the physical crude oil market and ensure oil reaches the most energy-stressed countries.”
Ahead of this announcement, Mr Lescure said the meetings would include discussions on how to increase support for Ukraine, whose finance minister would be present the future of Western sanctions against Russia.
“We need to have a conversation to make sure we all agree that, firstly, Ukraine needs to be supported and secondly, Russia should not be a winner in this conflict,” Lescure said.
The United States is under pressure from its allies to take tougher action against Russia in the future.
“Now is not the time to ease sanctions pressure against Russia,” said Valdis Dombrovskis, the EU commissioner responsible for the trade bloc’s economy. “Instead, we need to actually increase and increase that pressure.”