In current dollar terms, the G7 countries’ share in global GDP in 2025 is expected to be about 45%. This number used to be more than 60% until two decades ago and was more than two-thirds for a decade beginning in the mid-1980s. A break-up of GDP shares by US and non-US members of the G7 and the US shows that the group’s loss in global GDP share is primarily a reflection of the loss of economic prowess of the
- The G7 is way past its economic primeIn current dollar terms, the G7 countries’ share in global GDP in 2025 is expected to be about 45%. This number used to be more than 60% until two decades ago and was more than two-thirds for a decade beginning in the mid-1980s. A break-up of GDP shares by US and non-US members of the G7 and the US shows that the group’s loss in global GDP share is primarily a reflection of the loss of economic prowess of the non-US members. In fact, the GDP gap between US and non-US members of the G7 has been rising consistently in the recent past and is expected to maintain the trend.
- China has caught up with the non-US G7 members in terms of GDP and all of it in terms of manufacturing outputIMF data shows that global GDP share of non-US G7 countries started declining at a sharp pace from 2000 onwards. This is almost the same time when China started increasing its GDP share in the world after it was granted accession in the World Trade Organisation (WTO). While the US has managed to arrest its global GDP share decline since the 2010s, and China’s rising GDP share has flattened as well these numbers are unlikely to provide any relief to the G7 at large irrespective of the fact whether it’s the US or its non-US members. This is because China’s growth slowdown has not prevented its rising manufacturing prowess and it has already overtaken the manufacturing value added of all of G7 in terms of global manufacturing output. As China makes advances in more and more cutting-edge manufacturing activities, industrial activity in the G7 and with it both employment and external balance is likely to come under more pressure. This is causing both political and economic discomfort in the group, almost all of which have seen a rise in populist anti-globalisation politics.
- G7’s bigger problem is the rift withinThe G7 could have lived with its problems outside the block had it been united inside. Donald Trump’s re-election as the US president has delivered a huge shock to the intra-block unity because of two reasons. One, unlike Trump’s first term, his trade war is now targeting not just China but every trade partner of the US and G7 members are also in the firing line. All G7 members have to face Trump’s baseline tariff rate of 10%. However, since the US has levied additional tariffs on steel, auto and aluminium, the effective tariff rate could be even higher. In the case of Japan for instance, it also faces an additional effective tariff rate of 5.24% on top of the baseline, according to data from Atlantic Council, a US-based think tank. Meanwhile, Germany has to face an additional tariff of 3.47% on top of the 10% baseline. Given the fact that G7 countries have significant export shares to the US, this is a major economic problem for them. The US accounted for nearly 14% of G7 exports in 2024, according to the Trade Map database.
- G7 also need to grapple with a faltering US security blanketThe second problem in the G7 is for its European members who are worried about the US’s attitude towards the ongoing Russia-Ukraine war in Europe where Trump is unwilling to invest more military resources even as Europe has self-inflicted major economic pain by foregoing cheap Russian energy imports. As almost all advanced countries grapple with slow economic growth and high levels of national debt, raising military spending to substitute US’s military withdrawal is becoming a bigger cause for economic and political pain in these countries. While some G7 members such as Canada have seen an anti-Trump political consolidation in this milieu, its European members are grappling with a right-wing tilt in their political environment. Will the G7 summit try and put up a brave front of unity with the US or will it erupt over the concerns and friction described above? If it’s the latter, it could well be among the most important meetings of what was once considered to be the most powerful economic grouping in the world.
Sreedev Krishnakumar is a data journalist who specialises in stories at the intersection of the economy, geopolitics, politics and finance. His work combines data analysis, reporting and visual storytelling to explain complex issues through evidence-based journalism, with a focus on making public data accessible and meaningful for readers. He joined the Data and Political Economy team at Hindustan Times in 2024 after working as a correspondent/data journalist at Moneycontrol, where he covered macroeconomics, markets, public finance and business. Over the course of his career, he has developed expertise in analysing large datasets, building interactive visualisations and using computational methods to uncover trends and patterns that inform public debate. Sreedev holds a Postgraduate Diploma in Integrated Multimedia Journalism from the Asian College of Journalism. His reporting interests include finance, economics, geopolitics, trade, technology and development.
Roshan Kishore is the Data and Political Economy Editor at Hindustan Times. He heads the newsroom's data journalism team, which produces Number Theory, a daily data-driven feature for the print edition and the HT app. Number Theory uses data analysis and story-telling based on it to add value to the newsroom’s daily coverage by putting stories in a larger context on a range of issues, including politics, macroeconomy, markets, global affairs and climate. Under his leadership HT’s data journalism work has established itself as a niche product in Indian journalism and pushed the boundaries of marrying academic rigour with news sense and speed. Along with writing and editing data stories, he has also been writing a weekly political economy column called Terms of Trade for HT Premium. A trained economist with an MPhil degree from Jawaharlal Nehru University, Kishore has also been a visiting fellow at the Centre for Advanced Studies of India (CASI) at the University of Pennsylvania. Along with his journalistic work, his writings have also appeared in journals such as the Economic and Political Weekly and working papers for CASI and UNESCAP.