As world leaders gather for the G7 summit in Kananaskis, Canada, they face pressing questions regarding trade stability and geopolitical alliances. The virtual summit runs from June 26-28. When it happens, it will be historic—one of the central promises of the Group of Seven, first convened fifty years ago, was to provide a multilateral forum for advanced economies to coordinate responses to shared economic and geopolitical challenges. This year the club consists of the U.S., U.K, Canada, France, Germany, Italy, Japan and the European Union. In addition, leaders from the countries of Australia, Brazil, Mexico, Indonesia, Ukraine, South Africa and South Korea have been invited to join.
The backdrop of this year’s summit is largely influenced by the internal dynamics created by former President Donald Trump’s policies. Trump at the 2019 G7 summit in France, his last such summit. His smorgasbord of trade tariffs have made this point particularly difficult. Now, with the shadow of a global trade war threatening the very tenets of multilateralism, the group’s shown unity is at risk.
In recent months, Canada has taken retaliatory measures against U.S. tariffs, implementing its own 25% tariff on U.S. imports while suspending some tariffs to protect domestic industries. The G7 leaders must navigate these tensions as they address ongoing turmoil in Ukraine and the Middle East, which are set to dominate discussions at the summit.
Further, bilateral meetings, presumably with Trump himself, have become the norm for leaders wanting a free trade agreement. In May, the U.K. negotiated a full-scale trade deal with Washington. This deal is just the latest layer in a new and emerging dialogue about international trade.
John Lipsky, a former International Monetary Fund deputy director, underscored the historical importance of the G7.
“The G7 was formed fifty years ago so the world’s advanced-economy democracies could align on shared economic and geopolitical challenges. But what happens when the cause of instability is coming from inside the G7? That’s the question confronting the leaders as they assemble this week in Kananaskis,” – John Lipsky.
Trade instability, stoked primarily by US actions, have alarmed not just G7 members but the world. The war in Ukraine has already caused hundreds of civilian casualties. At the same time, a new round of hostilities between Israel and Iran has increased fears of an immediate economic impact.
Additionally, Ukraine will be a recurring topic, with growing domestic pressure to ramp up sanctions against Russia. After all, the president’s position on Russia has been anything but clear, making the potential results of the summit even more troublesome.
An unnamed source expressed concerns about Trump’s approach to coordination among G7 members:
“Trump will try to coordinate the [G7] group against China’s economic coercion. But the rest of the leaders may turn back to Trump and say that this kind of coordination, which is at the heart of why the G7 works, would be easier if he weren’t imposing tariffs on his allies,” – Unnamed.
In response to these challenges, Canada has opted to abandon the customary communique typically issued at the conclusion of G7 summits. This departure from tradition reflects a recognition of the complexities facing the group as they attempt to forge a unified front amidst diverging interests.
John Lipsky further emphasized the urgency for collective action among G7 nations:
“In previous meetings, G7 members have made clear their interest in addressing technological advancements, public health, major wars, and other issues beyond the group’s traditional mandate. With many international institutions today paralyzed by geopolitical rivalries, the world needs concerted action now more than ever,” – John Lipsky.
Meanwhile conversations are continuing in Kananaskis. Those world leaders are still dealing with tremendous external pressure and exacerbated internal pressures, dramatically shaping their short-term agenda and the long-term prospects of global cooperation. With ongoing trade disputes and geopolitical conflicts at the forefront, this year’s G7 summit will test the resilience of one of the world’s key alliances.