For all the talk of consensus among the Group of 20 major economies, the differences among the countries are hard to miss. While there is agreement that economic headwinds are growing stronger and that existing trade rules need to be modernized, there remains a yawning gap on how to achieve those objectives. The majority view is that multilateral frameworks are the appropriate mechanism for reform, but it is not unanimous, and the main holdout, the United States, has the ability to not only block such efforts, but it can do considerable damage to the existing international trade architecture. Japan, chair of the G20 this year, must find common ground between the U.S. and the other members when it hosts the leaders meeting this month.

The joint communique issued at the end of the meeting of finance ministers and central bank heads, held over the weekend in Fukuoka, warned that growth "remains low and risks remain tilted to the downside" and that risks from geopolitical tensions were "intensifying." While the statement merely noted the importance of trade, Christine Lagarde, managing director of the International Monetary Fund, was more blunt, noting that "the principal threat stems from continuing trade tensions," and warning that IMF estimates indicate that the U.S.-China trade war could reduce global GDP by 0.5 percent in 2020, about $455 billion. She urged Washington and Beijing to resolve their current problems, eliminate existing tariffs and avoid new ones, and then join the rest of the world to fix the international trade system.

There is little chance of that now. Both sides in that standoff are digging in. U.S. Treasury Secretary Steven Mnuchin denies that the trade fight had hurt U.S. growth and promises that Washington would help consumers and producers impacted by the dispute, while the Chinese leadership is girding for another "Long March," rallying its public around a fight that it claims will determine the fate of the nation. Much appears to ride on the meeting between U.S. President Donald Trump and Chinese President Xi Jinping that is supposed to take place on the sidelines of the G20 summit in Osaka.