G7 summit in Évian faces high-stakes global market shifts amid US-Iran talks and rare-earth supply concerns

The G7’s meeting in Évian-les-Bains opens against a backdrop unusually heavy with market-moving risk: a possible US-Iran understanding that could reopen the Strait of Hormuz, a 15% universal US import tariff due to expire on 24 July, and a rare-earths squeeze that has already exposed the fragility of Western supply chains.

According to reporting by Reuters and other outlets, President Donald Trump said on Thursday that Washington had reached a “great settlement” ...

with Iran, subject to final paperwork, and suggested the deal could be signed in Europe as early as the weekend. He also said the Strait of Hormuz would reopen once the agreement was finalised. A senior Iranian official, quoted by the South China Morning Post, said a deal was likely, with Geneva under discussion as a possible venue. But Iran’s foreign ministry and state media struck a more cautious note, indicating that the agreement was not due to be signed on Sunday and disputing elements of Trump’s description.

The dispute matters because Hormuz remains one of the world’s most sensitive energy chokepoints. The waterway carries roughly 20 million barrels of oil a day, according to the US Energy Information Administration, and the brief shutdown that followed the February escalation in hostilities between the United States, Israel and Iran shook global shipping and pushed up oil prices. Euronews reported in March that G7 foreign ministers backed the principle of securing passage through the strait, but only after the war ends and in a defensive posture. Even the prospect of a reopening now has immediate implications for freight rates, tanker routing and industrial costs.

The summit’s other major pressure point is trade. The Trump administration’s 15% universal import surcharge, imposed after the Supreme Court struck down earlier tariff measures, is set to lapse on 24 July unless Congress acts or a replacement authority is put in place. Trade analysts say the administration is more likely to use the G7 to prepare successor measures, including parallel Section 301 actions, than to let the policy simply disappear. For importers, the difference is stark: if the levy falls away, landed costs drop overnight.

Yet the most durable issue on the table may be the least theatrical. Europe’s rare-earth dependence on China has deepened into what analysts describe as a strategic emergency. The Atlantic Council has said Europe relies on China for all of its heavy rare earths, most of its light rare earths and almost all rare-earth magnets, while the International Energy Agency has found that China leads refining in 19 of the 20 most strategically important minerals. Those materials underpin electric vehicles, wind turbines, industrial motors, data centres and defence systems, making the supply risk far broader than a simple mining dispute.

French officials are reportedly exploring a permanent G7 secretariat to carry the minerals agenda across future presidencies, moving the forum away from its annual, stop-start approach. Reuters, as cited by Mining.com, said the body could be based at either the International Energy Agency or the OECD in Paris. That would mark a more structural response to an issue that Canada’s 2025 presidency had already pushed onto the G7 agenda through its Critical Minerals Action Plan.

Paris is also trying to widen the diplomatic frame. On Thursday, President Emmanuel Macron convened a video meeting he branded the “Global Convergence for Growth”, bringing together G7 finance ministers, IMF representatives and, unusually, Chinese Vice Premier Zhang Guoqing. Zhang’s participation was notable given Beijing’s longstanding hostility to the G7, and he used the occasion to call for “a free and convenient trade environment” and said China would “continue to share development opportunities with other countries.”

That intervention underlines how much of the summit’s agenda is shaped by China, even when it is not formally present. European policymakers are increasingly alarmed by Beijing’s export power in electric vehicles, batteries and advanced manufacturing, while analysts have warned that the region is facing a second wave of industrial disruption.

Whether Évian produces a breakthrough is another matter. Jiji Press, via Nippon.com, reported that leaders may again forgo a joint communiqué, opting instead for separate outcome papers. If so, it would be the second year in a row that the group has struggled to present a unified final text. Even without a grand declaration, the summit’s consequences could be immediate: for oil markets if Hormuz reopens, for importers if tariff rules shift, and for manufacturers if the G7 finally moves from warnings about mineral dependence to binding co-operation.

Source: Noah Wire Services