What's A Global Economy Between Friends?

Trump and Xi have turned this year’s G-20 into a high-stakes showdown.

- Shawn Donnan and Peter Martin

There was a time in the not-too-distant past when “G” summits were earnest, even turgid affairs, at which worthy matters were discussed in polite sitdowns between the leaders of major economies. That was before Donald Trump, of course. If the American president has done anything during his time in office, he’s added drama, spice, and the dual tensions of consequence and uncertainty to the once-carefully scripted art of international summitry.

And yet, as the leaders of the Group of 20 countries prepare to gather in Japan on June 28-29, Trump is outdoing even himself. His threats to escalate a trade conflict with China into a total economic war have turned the Osaka summit into arguably the most consequential since the ones surrounding the 2008 global financial crisis. As if the stakes weren’t high enough, Trump also has the trade gun barrels aimed at the European Union and Japan, two allies he’s threatened with auto tariffs— not to mention his public fuming about both euro zone and Chinese monetary policy.

For all of that, the biggest event in Osaka is likely to be a sideline meeting between Trump and Chinese President Xi Jinping, which financial markets will be watching carefully. After playing down its likelihood, Trump raised expectations on June 18 when he tweeted that, after a “very good telephone conversation,” the two leaders would hold an “extended meeting” during the summit.