Rising oil prices, trade tensions, and fears over supply chain disruptions dominate high-stakes talks among the world’s leading economies…..
Finance ministers and central bank governors from the Group of Seven began high-level talks in Paris on Monday amid growing fears that the escalating conflict in the Middle East could further weaken the global economy and intensify inflationary pressures worldwide.
The two-day meeting, hosted by France under its rotating G7 presidency, is expected to focus heavily on the economic fallout from the ongoing Iran war, disruptions in global energy markets, and mounting concerns over trade tensions and supply chain vulnerabilities.
French Finance Minister Roland Lescure said the world economy is facing a period of deep structural imbalance that requires greater international coordination and policy cooperation.
“The way the global economy has developed over the past 10 years is clearly not sustainable,” Lescure told journalists ahead of the summit.
According to him, rising fiscal deficits in the United States, weak technological competitiveness in Europe, and China’s economic strategy of pushing excess industrial production into foreign markets are creating fresh pressure on global trade and financial stability.
The meeting also comes at a delicate moment for the G7, as geopolitical tensions continue to rise following renewed conflict in the Middle East and ongoing trade disputes triggered by tariffs introduced by U.S. President Donald Trump.
Trump’s hardline trade policies and increasingly transactional approach to foreign relations have unsettled many allies, with concerns growing that economic fragmentation could worsen at a time of slowing global growth.
Another major issue dominating discussions is the G7’s effort to reduce dependence on China for critical minerals and rare earth materials used in advanced technologies, including artificial intelligence, electric vehicles, and defence systems.
Western governments have become increasingly concerned about overreliance on Chinese supply chains after Beijing expanded its dominance in the global market for rare earth processing and strategic raw materials.
French officials say the goal is to build greater “economic security” by diversifying supply chains and strengthening domestic production capabilities among allied nations.
Lescure said the G7 wants to ensure that no single country controls access to strategic resources essential for industrial growth and technological development.
The meeting is also expected to address the worsening energy crisis caused by instability in the Strait of Hormuz, a critical route for global oil and gas shipments.
German Finance Minister Lars Klingbeil warned that the war is already causing significant damage to global economic activity and called for urgent diplomatic efforts to restore stability in the region.
“This war is massively damaging economic development,” Klingbeil said, stressing the importance of keeping shipping routes through the Strait of Hormuz open.
Oil prices have surged in recent weeks as fears of prolonged supply disruptions intensified, raising concerns that central banks may be forced to keep interest rates higher for longer to contain inflation.
The talks in Paris are also serving as a preparatory meeting ahead of the broader G7 summit scheduled to hold in Evian, France, from June 15 to 17.
Finance ministers from Kenya, Brazil, India, and South Korea have also been invited to participate in Tuesday’s discussions as global powers seek wider cooperation on economic resilience and supply chain security.
French authorities are pushing for the creation of a “common toolbox” that would allow countries to respond collectively to disruptions in critical raw materials markets through strategic trade agreements, quotas, tariffs, and coordinated investment initiatives.
Among the projects highlighted by France is a joint French-Japanese facility currently under construction in southwest France aimed at producing and recycling rare earth materials, magnets, and other strategic minerals.
The French government has reportedly invested more than €100 million in the project as part of efforts to strengthen Europe’s industrial independence and reduce external vulnerabilities.
Officials say similar partnerships and investment programmes could become increasingly important as governments race to secure energy supplies, critical minerals, and advanced manufacturing capacity in an era of rising geopolitical competition.
