G7, Including Canada, Issues Stern Warning to China Over Support for Russia and Unfair Trade

Leaders of the Group of Seven (G7) nations, meeting in Puglia, Italy, have presented a united front against China, issuing a direct and forceful warning over its support for Russia's war effort in Ukraine and its non-market economic policies that are distorting global markets. Canadian Prime Minister Justin Trudeau joined his counterparts from the United States, United Kingdom, France, Germany, Italy, and Japan in a communiqué that signals a significant hardening of the bloc's stance towards Beijing.

The primary focus of the warning was China's role in sustaining Russia's defense industrial base. While China is not accused of directly supplying weapons to Moscow, the G7 leaders stated that Beijing is providing dual-use materials, including machine tools, microelectronics, and other critical components that Russia is using to rebuild its military capabilities. This support, the leaders argued, allows Russia to circumvent extensive Western sanctions and prolong its aggression against Ukraine. The final statement called on China to "cease the transfer of dual-use materials, including weapons components and equipment, that are inputs for Russia's defence sector." The group expressed "deep concern" about this support and threatened further action, including sanctions against Chinese and third-country entities that facilitate this trade.

This unified message builds on previous statements where G7 leaders, including Trudeau, issued a stern warning to China over its actions. The explicit threat of additional measures underscores the growing frustration within the alliance over what they see as China's complicity in undermining international security.

Economic Security and Unfair Competition

Beyond the conflict in Ukraine, the G7 also confronted China on its economic practices, specifically targeting the issue of industrial overcapacity. The leaders voiced concerns that Beijing's extensive state subsidies and non-market policies are leading to a flood of low-cost goods, particularly in green technology sectors like electric vehicles (EVs), solar panels, and lithium-ion batteries. This, they contend, creates an uneven playing field, threatens the viability of industries within their own countries, and poses a risk to global economic resilience.

For Canada, this issue is particularly salient. The Canadian government has invested heavily alongside provincial partners to attract major investments in its own EV supply chain, from battery manufacturing plants to critical mineral processing. The influx of heavily subsidized Chinese EVs could undermine these efforts and jeopardize Canadian jobs. The G7's statement affirmed their commitment to protecting their workers and industries from "unfair practices," signaling a potential for coordinated tariffs or other trade barriers. The United States and the European Union have already moved to impose or investigate higher tariffs on Chinese EVs, and the G7's collective stance suggests broader action could be forthcoming.

The final communiqué reflected a consensus that had been building for some time, as the G7 issued a unified warning to China on these fronts, linking economic grievances directly to national security. The leaders stated they are not seeking to harm China or thwart its economic development but are determined to act against policies that lead to "harmful overcapacity" and "global spillovers."

Broader Geopolitical Tensions

The G7's message also extended to other areas of geopolitical friction. The leaders reiterated their commitment to a "free and open Indo-Pacific" and expressed serious concern over the escalating tensions in the South and East China Seas. They opposed any unilateral attempts by China to change the status quo by force or coercion and condemned the increasing use of dangerous maneuvers by Chinese coast guard and maritime militia vessels against Philippine ships. This aligns with Canada's own Indo-Pacific Strategy, which emphasizes the importance of international law and freedom of navigation.

The issue of Taiwan was also addressed, with the G7 reaffirming the importance of peace and stability across the Taiwan Strait and calling for a peaceful resolution of cross-strait issues. Furthermore, the leaders voiced ongoing concerns about the human rights situation in China, specifically mentioning Tibet and Xinjiang, as well as the erosion of autonomy in Hong Kong.

China's Response

Beijing has consistently rejected the G7's criticisms. In response to the summit's conclusions, China's foreign ministry accused the group of being "fraught with arrogance, prejudice and lies." A spokesperson reiterated that China has not provided weapons to either side of the Ukraine conflict and strictly controls the export of dual-use items. On the economic front, Beijing has labeled the accusations of overcapacity as a pretext for protectionism, arguing that its green tech exports are a contribution to the global fight against climate change and that their competitiveness stems from innovation, not subsidies. China has warned that it will take all necessary measures to defend its interests in the face of what it perceives as containment efforts by the West.

The G7's increasingly firm and unified stance sets the stage for a period of heightened tension. While the group emphasizes a desire to de-risk, not decouple, from China, the lines between economic competition and security confrontation are becoming increasingly blurred. For Canada, navigating this complex relationship will require a delicate balance between upholding its alliances, protecting its economic interests, and managing its bilateral relationship with a global superpower.