Avoid trade war with China, French Finance Minister tells G7

French Finance Minister Bruno Le Maire said Friday the G7 must provide a “united front” against China’s unfair trade and industrial overcapacity, without triggering a trade war.

As G7 finance ministers and central bankers met for the first day of negotiations in Stresa, northern Italy, Le Maire told reporters that “the first challenge” was to “define trade rules fair with China.

“China is our economic partner. But it has industrial overcapacity. And the G7 must present a united front to protect its industrial interests,” declared Mr. Le Maire.

“All instruments at our disposal must be used, whether at the G7 level or at the European level, to protect our industrial interests and protect us from unfair commercial practices,” he added.

On Wednesday, US Treasury Secretary Janet Yellen issued a similar message, saying the Group of Seven world powers “and the growing number of countries” threatened by China’s industrial overcapacity must “present a clear and united front.” .

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The United States and European Union fear that a surge in low-cost Chinese exports, fueled by Chinese government support in key sectors like solar and electric vehicles, poses a risk to global markets.

But Le Maire warned that a trade war must be avoided.

“We absolutely must avoid any kind of trade war, because the trade war is not in the interest of the United States, nor China, nor Europe, nor any country in the world.”

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Le Maire said he would propose to the G7 and the IMF a “thorough joint assessment” of the issue.

“We must have a fair, very frank and very open dialogue with our Chinese partner, because China is an economic partner.”

One of the main topics on the G7 meeting’s agenda is a plan to fund crucial aid to war-torn Ukraine, using interest generated from the 300 billion euros ($325 billion dollars) of Russian central bank assets frozen by the G7 and Europe.

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