Leaders from the Group of 20 nations (G20) will meet in Osaka from Friday in what is likely to be its most important summit since the global financial crisis.

When the G20 met in Washington one month after the Lehman Brothers crash in 2008, they were focused on a mammoth task: how to piece the world economy back together and avoid a future crisis.

A decade later the G20 nations face another huge challenge in resolving a US-China trade war that has rattled businesses around the world, and cast a shadow over the global economy.

That's why the meeting between US President Donald Trump and Chinese President Xi Jinping on Saturday will be so closely watched.

They last met seven months ago at another G20 summit in Buenos Aires. Over grilled sirloin and caramel rolled pancakes, the pair agreed on a 90 day truce to their trade war.

Now, reports are emerging that another trade truce could be struck in Osaka.

While that would provide markets with some relief, it won't mean the trade war is over.

In the months leading up to the G20 meeting in Japan, the trade clash between the world's two largest economies has escalated.

The US tightened restrictions on Chinese telecom champion Huawei and four other Chinese tech firms by putting them on a trade "blacklist".

Beijing responded angrily with threats of its own trade ban, and in recent weeks has increased scrutiny on American firms operating in China, including FedEx.

If they don't strike a trade deal, Mr Trump has threatened to impose tariffs on $300bn (£236.5bn) of Chinese goods - that would mean pretty much everything that China sells to the US would be subject to tariffs.

But while many US businesses approve of Mr Trump's hardline stance on China, more tariffs is the last thing they want.

Companies have urged Mr Trump to end the trade war, warning of higher prices and risks to their future.

Both leaders are under pressure at home to show they are walking away with the best deal - so they won't want to give too much ground.

But with China's economy slowing, and Mr Trump heading into an election year, neither side can afford to let the trade war go on for much longer.

If a truce is announced, there will be relief from G20 nations too.

The trade war is having an impact on global growth, with the International Monetary Fund and others warning that escalating US-China trade tensions are among the biggest threats to the world economy.

BBC
BDST: 126 HRS, JUNE 27, 2019
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