G7, Including Canada, Issues Stern Warning to China Over Russia Support and Economic Policies

The Group of Seven (G7) concluded its recent summit with a strongly worded communiqué, taking direct aim at China's role in supporting Russia's war effort in Ukraine and its trade practices that are causing global economic friction. Leaders from Canada, the United States, the United Kingdom, France, Germany, Italy, and Japan, along with representatives from the European Union, presented a united front, signaling a significant hardening of their collective stance towards Beijing.

Prime Minister Justin Trudeau, representing Canada, joined his counterparts in expressing "deep concern" over China's transfer of dual-use materials and components to Russia. The G7 leaders stated that this support is enabling Moscow to reconstitute its defense industrial base, directly prolonging the conflict in Ukraine and undermining the extensive sanctions regime imposed by Western nations. The statement called on China to cease these transfers, warning that failure to do so would result in further coordinated measures. This unified message underscores the gravity with which the G7 leaders view Beijing's actions as a threat to international peace and security.

Economic Security and Industrial Overcapacity

Beyond the geopolitical implications of its support for Russia, the G7 also confronted China on economic grounds. The leaders voiced serious concerns about what they termed China's "persistent industrial targeting and comprehensive non-market policies and practices." These policies, they argue, have led to massive industrial overcapacity in key sectors, most notably electric vehicles (EVs), solar panels, and lithium-ion batteries.

This overcapacity results in Chinese companies flooding global markets with low-priced goods, which the G7 contends creates harmful global spillovers, market distortions, and undermines the economic security of their own nations. For countries like Canada, which are making significant public and private investments in building a domestic EV and battery supply chain, the threat of being undercut by state-subsidized Chinese products is a major economic concern. The G7 statement affirmed the group's commitment to protecting their workers and industries from these unfair practices and indicated they would not operate in isolation. The explicit threat that the G7 warns China of 'further measures' suggests that coordinated tariffs or other trade barriers could be on the horizon if Beijing does not address these concerns.

Canada's Position and Implications

Canada's participation in this strong G7 stance aligns with its recent foreign policy shifts, which increasingly frame the relationship with China through the lens of national and economic security. The Trudeau government has been under pressure from allies, particularly the United States, and domestic industries to take a tougher line on Chinese trade practices. The U.S. recently announced steep tariff hikes on Chinese EVs and other green technology products, and the European Union has launched its own investigation into Chinese EV subsidies.

While Canada has not yet announced similar tariffs, its inclusion in the G7's unified statement signals that Ottawa is seriously considering its options. The Canadian automotive and steel industries have been vocal about the need for protective measures to ensure a level playing field. The government faces a delicate balancing act: protecting nascent domestic industries and aligning with key allies, while managing the potential for economic retaliation from China, which remains a significant trading partner.

China's Response

Beijing has consistently rejected the G7's accusations. In response to the summit's communiqué, China's foreign ministry accused the group of hypocrisy, protectionism, and of using economic issues as a pretext to contain its growth. Chinese officials deny providing lethal military aid to Russia and maintain that their trade in dual-use goods is conducted in accordance with international law. On the economic front, Beijing argues that its success in green technology sectors is a result of innovation and competitive advantages, not unfair state subsidies, and that its exports are helping the world achieve its climate goals. The G7's statement was dismissed as a smear campaign intended to hinder China's development.

The increasingly confrontational language from both sides highlights the growing divide between the world's leading industrial democracies and China. The G7's unified message marks a pivotal moment, moving beyond individual national grievances to a collective strategy aimed at countering China's influence on multiple fronts. The coming months will be critical in determining whether this diplomatic pressure leads to changes in Beijing's policies or results in an escalating cycle of sanctions and trade disputes.