G7 Weighs Tariffs on Low-Value Chinese Goods Amid Concerns Over Market Disruption

Finance ministers from the Group of Seven (G7) nations have begun formal discussions on imposing coordinated tariffs on low-value Chinese products, citing growing concerns over market disruption from oversupply and non-market practices.

Speaking at the opening of a G7 finance summit in Banff, Canada, Finance Minister François-Philippe Champagne said the talks will focus on how the world’s largest advanced economies can jointly address issues stemming from China’s mass exports of low-cost goods. The concern, Champagne noted, is the increasing strain such exports place on domestic producers and retailers in G7 nations.

“Overcapacity and non-market practices must be addressed with firm and united action,” Champagne told reporters. “We’re exploring coordinated strategies, including potential tariffs, to counteract the distortion these products bring to our economies.”

Much of the focus has turned to Chinese e-commerce platforms such as Temu and Shein, which have been accused of exploiting trade loopholes to flood Western markets with cheap goods. The U.S. took a decisive step earlier this month by ending the “de minimis” exemption, which had allowed duty-free entry for small packages under a certain value threshold. That move is expected to significantly reduce the flow of such goods into the U.S.

According to Bloomberg data, China exported roughly US$94 billion worth of these small parcels in 2024, with nearly 25% destined for the U.S. As American shoppers rushed to place last-minute orders ahead of the tariff change, shipments surged nearly 30% in April compared to a year earlier. Analysts now expect that trade to decline, raising fears that excess supply may be redirected toward Europe and other G7 markets.

European countries are already responding. The EU is considering a flat customs fee on small packages, and France has proposed additional levies. The UK and Japan are also reviewing similar measures to protect their local industries.

In addition to trade with China, the G7 finance summit is tackling issues related to the war in Ukraine. Ukrainian Finance Minister Serhiy Marchenko called for a revision to the G7’s existing US$60 per barrel price cap on Russian oil exports, arguing that a lower cap would put greater financial pressure on Moscow.

“This is a good opportunity to revise the cap,” Marchenko said. “We believe it can help make Russia’s economy suffer more directly.”

However, consensus on the issue may prove difficult, especially following a recent phone call between U.S. President Donald Trump and Russian President Vladimir Putin. Trump described the call as “excellent” and floated the idea of increased trade with Russia should the war end, a comment that has raised concerns among European allies.

While the EU recently passed a new sanctions package targeting Russia’s “shadow fleet” of oil tankers, lowering the oil price cap would require full agreement among all G7 members—something that may prove elusive amid divergent political approaches to the war.

The G7 finance meetings are set to continue through the week, with trade policy and energy sanctions topping the agenda.