G7 Leaders Present United Front Against China's Industrial Overcapacity and Support for Russia

Leaders of the Group of Seven (G7) concluded their summit with a stark and unified message for Beijing, vowing to take action against what they describe as China's harmful industrial overcapacity and its ongoing support for Russia's military aggression in Ukraine. The joint communiqué represents one of the strongest collective rebukes of China's economic and foreign policies by the world's leading democracies, setting the stage for potential coordinated trade measures.

The central economic concern articulated by the G7—comprising Canada, the United States, the United Kingdom, France, Germany, Italy, and Japan—is China's use of extensive state subsidies and other non-market policies to dominate global manufacturing in key sectors. The statement specifically highlighted electric vehicles (EVs), lithium-ion batteries, solar panels, and semiconductors as areas where Chinese government support has led to massive overproduction. This, the G7 argues, results in artificially low-priced goods flooding global markets, undermining fair competition and threatening the viability of industries and jobs within their own countries.

"We are not trying to harm China or thwart its economic development," the statement read, but it emphasized that the G7 would "continue to take actions to protect our workers and businesses from unfair practices." This language signals a move beyond simple expressions of concern towards tangible countermeasures, which could include new tariffs and other trade barriers. The United States has already imposed steep tariffs on Chinese EVs, and the European Union is poised to follow suit. Canada is reportedly considering similar measures to protect its burgeoning EV manufacturing sector, which has received billions in federal and provincial government investments.

For Canada, the issue is particularly acute. The federal government has staked significant political and financial capital on building a domestic EV supply chain, from critical mineral mining to battery manufacturing and vehicle assembly. The prospect of this nascent industry being undercut by a flood of subsidized Chinese imports is a major concern for Ottawa. This unified position builds on earlier discussions where the G7 confronted China on industrial overcapacity and support for Russia, with Canada at the forefront of calls for a coordinated response to ensure a level playing field.

Beyond the economic friction, the G7 also took a firm line on China's role in the Russia-Ukraine war. The leaders accused Beijing of providing Moscow with dual-use materials and components—such as microelectronics, machine tools, and other industrial items—that are critical to Russia's defense industry. While China is not sending lethal weapons, this support is seen as enabling Russia to circumvent Western sanctions and sustain its military campaign. The G7 called on China to cease these transfers, warning of further sanctions against Chinese entities involved in this trade.

The concerns are particularly acute in the high-tech sphere, which is why Canada joined a US-led alliance to secure the global semiconductor supply chain, a move aimed at reducing dependency on potentially adversarial nations and preventing critical technology from being funneled to hostile actors. This strategic alignment underscores the G7's broader effort to "de-risk" from China without completely decoupling their economies.

Beijing has vehemently rejected the G7's accusations. A spokesperson for the Chinese Foreign Ministry dismissed the communiqué as being "full of arrogance, prejudice, and lies." China maintains that its industrial success is the result of innovation and competitive advantages, not unfair subsidies, and accuses the West of protectionism. On the issue of Russia, Beijing insists it has not provided weapons to either side and that its normal trade with Moscow should not be disrupted or constrained.

The G7's united front marks a significant moment in global geopolitics. For years, member nations have had varying approaches to China, with some European countries prioritizing economic engagement over confrontation. However, the combination of Russia's invasion of Ukraine and increasingly aggressive economic practices from Beijing appears to have forged a stronger consensus. The challenge now will be translating this consensus into effective, coordinated policy that doesn't trigger a full-blown trade war, which could have severe consequences for the global economy.