G7 leaders tackle China trade fears

Group of Seven leaders meeting in Italy are discussing how to protect their industries while avoiding an outright trade war with Beijing.

US President Joe Biden with French President Emmanuel Macron, left, Italy's Prime Minister Giorgia Meloni, Japanese Prime Minister Fumio Kishida and paratroopers after s a skydiving demonstration at the San Domenico Golf Course in Savelletri, Italy, for G7 attendees. Picture: AFP

G7 leaders turned their attention to China on Friday, with a focus on how to protect their industries while avoiding an outright trade war with Beijing.

Fair trade with the world’s second-largest economy, notably on green technology, was high on the agenda at the summit in Puglia ­between the leaders of the US, Japan, France, Germany, Italy, Canada and Britain.

The rich democracies were also seeking a common response to China’s alleged support of ­Russia’s military expansion, which Washington says is fuelling the war in Ukraine.

“G7 countries are on the same page vis-a-vis China,” a Japanese government source said.

The meeting comes amid souring trade relations between China and the West, exemplified by the EU’s announcement this week of plans to impose new tariffs on Chinese electric vehicles.

The US, Japan and the EU have all voiced concern over China’s so-called “industrial overcapacity”.

They say Beijing’s generous subsidies, particularly in the green ­energy and technology sectors such as solar panels and electric vehicles, result in unfairly cheap goods flooding the global market.

That excess capacity threatens Western companies struggling to compete, particularly in the growing green tech sector.

China has dismissed the concerns, but Washington is pressing for a united G7 front. The group’s finance ministers warned last month that they would weigh steps to “ensure a level playing field” for all countries.

On the eve of the summit at the luxury Borgo Egnazia resort, the EU threatened to hit imports of Chinese electric vehicles with tariffs of up to 38 per cent beginning next month.

Beijing denounced what it called “naked protectionist behaviour” and said it reserved the right to file a suit with the World Trade Organisation.

The US hiked tariffs last month on Chinese green tech imports, including a 100 per cent tariff on electric vehicles, as President Joe Biden blasted “cheating” on Beijing’s part.

AFP