The mood of the meeting has been taken over with discussions about the United States

 
A standoff in Washington over raising the U.S. debt ceiling overshadowed a meeting of G7 finance chiefs.

The ministers were gathering in the Japanese city of Niigata.

Global economic risks, including stubbornly high inflation, are among their key topics.

“A default would threaten the gains that we’ve worked so hard to make over the past few years in our pandemic recovery, and it would spark a global downturn that would set us back much further,” U.S. Treasury Secretary Janet Yellen said.

“It would also risk undermining U.S. global economic leadership and raise questions about our ability to defend our national security interests.”

The U.S. standoff is a headache for Japan, which is this year’s G7 chair and the world’s biggest holder of U.S. debt.

Past such fights have typically ended with a hastily-arranged agreement in the final hours of negotiations, avoiding a default.

“In the G7 this time around, it is unlikely that we will discuss in depth about specific topics,” Japanese Finance Minister Shunichi Suzuki said.

Even as rapid rate hikes by the Federal Reserve weigh on the U.S. economy, recent data has also shown signs of weakness in China, the world’s second-largest economy.

Figures released showed the country’s consumer prices rose at the slowest pace in more than two years in April, while factory gate deflation deepened.

Other key themes to be discussed at the G7 gathering include ways to strengthen the global financial system following the U.S. banking turmoil, and steps to prevent Russia from circumventing sanctions over its invasion of Ukraine.