Discussions on economic competition with China along with the Russian-Ukrainian war are expected to dominate the G7 summit in Japan.
Japan, which hosts the G7 meetings, is keen to focus more on economic competition and security in the Pacific, as well as on preventing a new nuclear arms race.
This does not mean that the war in Ukraine will be out of interest, but even the only American political proposal on the table relating to the war for a commercial purpose.
The U.S. is not satisfied with the largest-ever sanctions regime against the Russian economy, which came into force after Russia invaded Ukraine, under which exports to Russia fell by $5.7 billion a month or 57% overall.
Instead, Washington is requesting a total ban on the exports of G7 countries to Moscow.
Politico said that the U.S. demand might be « unrealistic » or « too much » for the rest of the G7.
The G7 countries face a crisis that revenues from all remaining monthly exports, which are worth about $4.7 billion, come from Europe at 89%, and then Japan at 7%.
Experts note that the US proposal should discuss the compensation that European and other manufacturers and farmers will receive after a total export ban on exports to Russia.
Officials say any reduction in exports to Russia would require adjustments to the existing sanctions regime, without which achieving its wishes would be difficult.
Among the changes required is the exemption of drugs from tariffs, the largest category of remaining exports.
These actions had a significant impact, weakening Russia’s ability to finance its unjust war. You can expect us making progress in taking steps to continue to hold Russia accountable « . Said a spokesperson for the US National Security Council.
Europe, which has already borne most of the economic burden of limiting its trade relationship with Russia, is unlikely to agree to a blanket export ban. As inflation continues to rise and the wider public is frustrated with leaders’ performance. Especially because the remaining goods for export are less related to the ongoing dispute such as German chocolate and French fragrances.
Therefore, the EU is likely to have stubborn resistance in accepting the US’ more costly request.
A single idea remains to be considered as a compromise to The G7, by overturning the current sanctions regime, to include only non-sanctioned products, and all not mentioned are presumed banned.
But this idea is also likely to face resistance. As two sources familiar with the discussions said.