Global Daily Tax News, EU To G7: Keep Calm And Take China On, (Jun 19, 2025)

The EU Commission President Ursula von der Leyen has appealed to G7 nations to dismantle tariff barriers to trade and work collectively to address distortions to international trading decisions.

At the latest G7 meeting, von der Leyen said: "Let me offer three reflections on why we believe it is in our shared interest to keep trade between G7 countries open."

"First, tariffs – no matter who sets them – are ultimately a tax paid by consumers and businesses at home. When companies face higher input costs, they pass them on through higher prices."

"Second, tariffs create uncertainty that disrupts business planning and investment. When I meet CEOs they often tell me that uncertainty is what they struggle with the most – it makes it harder to innovate and grow."

"Third, and perhaps most importantly, when we focus our attention on tariffs between partners, it diverts our energy from the real challenge – one that threatens us all."

"Because we agree: the current global trading system is not working as it should. Guardrails are clearly missing. On this point, [US President] Donald [Trump] is right – there is a serious problem. But we strongly feel that the biggest challenges are not the trade between G7 partners."

"Rather, the sources of the biggest collective problem we have has its origins in the accession of China to the WTO in 2001. China still defines itself as a developing country. This cannot be. China has largely shown that it unwillingness to live within the constraints of the rules based international system. While others opened their market, China focused on undercutting intellectual property protections, massive subsidies with the aim to dominate global manufacturing and supply chains. This is not market competition – it is distortion with intent. And it undermines our manufacturing sectors."

She said: "This is the problem we must solve – together. The G7 economies account for 45 percent of global GDP – and over 80 percent of intellectual property revenues. That is leverage – if we use it together."

"Let us channel it to build resilient supply chains. To strengthen our technological and industrial leadership. And to reform the rules of global trade – so they reflect today's economic realities. This is also why I am working closely with Donald toward a mutually beneficial trade agreement – one that reflects the strengths of our economies, supports our firms, workers, and consumers."