G7 trade ministers in Paris tackle China dependence, tariff threats, and supply chain security

G7 trade ministers held a second day of talks in Paris on Wednesday, confronting a global economy under pressure from US tariff threats, instability in the Middle East, and concerns over reliance on Chinese critical minerals.

France, which holds the rotating G7 presidency this year, set four priorities for the meeting: industrial overcapacity, critical minerals, reform of the World Trade Organization, and cross-border e-commerce. Ministers from the United Kingdom, Canada, Germany, Italy, Japan, and the United States are participating.

US Trade Representative Jamieson Greer attended the talks. In a video address during a session hosted by France's business community on Tuesday, Greer said: "The United States is taking action unilaterally, but also together with willing partners." He added: "We view the priorities that France is pursuing as G7 host this year as complementary to US efforts on trade." Greer was expected to hold separate meetings in Paris with EU Trade Commissioner Maros Sefcovic and French Economy Minister Roland Lescure.

France's junior trade minister Nicolas Forissier said earlier in the week that Europeans would discuss Trump's threat to raise tariffs on European cars and trucks "but not within the framework of the G7". The US and EU agreed last year to cap US tariffs on European vehicles and car parts at 15 percent, below the 25 percent duties imposed on many other trading partners. EU lawmakers approved the agreement in March, although member states still need to ratify it.

Middle East instability added urgency to the talks. French shipping group CMA CGM said on Wednesday one of its vessels was targeted while transiting the Strait of Hormuz, wounding several crew members and damaging the ship. The incident comes as President Donald Trump paused a US operation to escort ships through the strait during talks on a possible Iran agreement.

Efforts to reduce dependence on China for critical minerals emerged as a sensitive issue in the talks. The materials are used in products including electric vehicle batteries, computer chips, wind turbines, and defence equipment. France favours creating groups of countries that produce, process, and use the minerals, with members committed to good practices.

"One of the projects we have in mind within the G7 is to ensure – much as the International Energy Agency was created in the 1970s when OPEC held a production monopoly – that we develop alternatives through international cooperation," Lescure told reporters in Lacq, a town in southwestern France being developed as a rare-earth processing centre. He said China had captured a huge share of the market through heavy investment and pricing policies that drove potential competitors out.

France aims to produce enough rare-earth oxides to cover all European demand for heavy rare earths and around a quarter of demand for light rare earths by 2030. The French government also plans to loosen access to state guarantees for strategic projects, extend green industrial investment tax credits until 2028, and direct more funding through existing investment schemes.

Trade ministers also discussed the collapse in March of the latest WTO negotiations. "The goal is for this organisation to be better suited to current challenges," Forissier's office said.

The final issue on the agenda is the rise in small parcels entering countries through online shopping platforms, which have escaped customs duties and created unfair competition for local retailers. The US suspended tariff exemptions for packages worth under $800, while the EU plans to introduce a flat-rate customs duty this summer on parcels valued at under €150.

An online meeting of G7 ministers was scheduled for Thursday to continue discussions ahead of the leaders' summit, which is set for June 15-17 in Evian.