G7 Trade Relations in Unchartered Waters: Future-Proofing Trade Relations for a Changing Geopolitical and Geoeconomic Environment

Interdependencies in global trade are increasingly no longer seen as a win-win and welfare enhancing situation. Instead, they are perceived as a possible vulnerability, which can be weaponized for geopolitical purposes. In this challenging environment, G7 countries are attempting to strengthen supply chains for critical and strategic goods and technologies among themselves and with trusted partners. The current geoeconomic environment presents both a challenge and an opportunity for G7 countries to resolve older trade conflicts and address new trade disputes in more cooperative and strategic ways. The recent disruptions of the global value chain have centred the focus on security. Countries are now working to increase the resilience of their supply chains and diversify their trade relations, also to counter China’s pervasive influence in the economy through state-owned enterprises (SOEs) and subsidies.