By Leigh Thomas

PARIS, May 18 (Reuters) – G7 finance ministers gathering in Paris on Monday will try to find common ground on tackling global economic tensions and coordinating critical raw material supplies, even as geopolitical differences threaten to test the group’s cohesion.

The two-day meeting follows ‌a summit between U.S. President Donald Trump and Chinese President Xi Jinping in Beijing that yielded few concrete economic breakthroughs, as tensions over ‌Taiwan and trade simmered beneath a display of diplomatic cordiality.

At the core of the Paris agenda will be what French Finance Minister Roland Lescure described as deep-seated global economic imbalances that ​are fuelling trade friction and risk a turbulent unwinding in financial markets.

“The way the global economy has been developing for the past 10 years or so is clearly unsustainable,” he said, pointing to a pattern in which China under-consumes, the United States over-consumes and Europe under-invests.

UPDATE FROM US-CHINA SUMMIT

Lescure, who will host the talks, said the G7 offered an opportunity for frank dialogue among allies at a time of widening disagreements with Washington.

“These discussions are not easy. I’m not going to tell ‌you that we agree on everything, including, of course, ⁠first and foremost with our American friends,” he told journalists ahead of the meeting.

Finance ministers will be looking for an update on U.S.-China relations following the Trump-Xi summit and the latest U.S. efforts to re-open the Strait of Hormuz, as ⁠the Trump administration allowed a sanctions waiver on Russian seaborne oil to lapse on Saturday.

Merely agreeing each side bears some responsibility for the trade and capital flow imbalances would be a success, French officials involved in preparations said, though the U.S. side is likely to be reluctant.

FALLOUT FROM MIDEAST CONFLICT

“I’d be shocked if they’re going to sign ​on ​to the idea this is the U.S.’s fault in some way,” said Philip Luck, director ​of the economics program at Washington’s Center for Strategic and ‌International Studies.

Ministers are also due to discuss the economic fallout from the Mideast conflict and volatility on global bond markets, which are of particular concern to Japan.

Britain’s finance ministry said Rachel Reeves would “press for coordinated action to limit inflation and supply chain pressures, and restore freedom of navigation through the Strait of Hormuz” at the meeting, and also reassert the government’s desire to reduce trade barriers between Britain and the European Union.

Divisions within the G7 complicate efforts to project unity as ministers prepare for a June 15-17 leaders summit in the spa town of Evian.

CRITICAL MINERAL DEPENDENCE

A second priority will be critical minerals and ‌rare earths, where G7 governments are trying to coordinate efforts to reduce reliance on ​China, which dominates supply chains vital for technologies such as electric vehicles, renewable energy and defence ​systems.

Lescure said the G7 would push for stronger coordination to monitor ​markets, anticipate disruptions and develop alternative supplies, including through joint projects spanning allied economies. The aim is to ensure that “no ‌country can ever again have a monopoly” over such materials, he ​said.

G7 countries are trying to agree on ​a common toolbox of measures to stabilise markets and encourage domestic investment, possibly through price floors for producers, pooled purchases and also tariffs.

Nonetheless, the initiative is a long-term project that would yield little on the finance ministers’ meeting, said Luck, who worked on the issue in the ​Biden administration.

“We are in the very early innings of ‌figuring this out,” he said. “I don’t think there’s agreement on a strategy even within the U.S. government, let alone being able ​to articulate that in a convincing way to our partners in order to get them to sign on.”

(Reporting by Leigh Thomas; Additional ​reporting by David Lawder, Alistair Smout and Makiko Yamazaki; Editing by David Holmes)