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What should we expect from the G20 summit meeting that takes place in Osaka, Japan, at the end of this week? No quick end to the rumbling global trade war for a start – but Wall Street is betting on a truce, and that is probably what will happen.

The G20 matters because the countries represented there generate some 80 per cent of the world’s economic activity. Much has been made of the way the global economy has become ever more integrated, but global politics remain set in their national silos.

Well, the G20 is the nearest thing we have to a world government. It is, of course, a long way from that, but at least it gives a framework for discussions between the head of national states about their mutual self-interests. And right now, mutual self-interest requires a reasonable accord on keeping trade lines open.

Obviously, the great up-front issue is between China and the US. There will be an extended meeting between Xi Jinping and Donald Trump, and some kind of truce will probably be agreed. But I expect this will be a ceasefire that prevents further escalation, rather than reversion to the relationship that preceded Trump’s presidency. Big US companies are canny. They are already unwinding the complex supply chains that have developed over the past two decades, and seeking to replace (or at least supplement) Chinese suppliers with producers elsewhere in Asia and to some extent Latin America.

A truce makes sense for both. Both economies have been damaged. But the tussle for global economic leadership between the US and China will continue for at least a generation, and this summit will be just one more event in shaping the evolving relationship. See this as the start of another cold war, but one where economics and technology are the defining issues, not military might, as was the case with the US and Russia.

For Europeans and Britons, the next question will be in what way the US will challenge European trade policies. The US runs a current account deficit. The EU as a whole has a surplus and a larger one than China – though the UK, like the US, runs a deficit. So, once he feels he has stabilised the China situation, it would be natural for Trump to turn to Europe. It is not on the agenda, but expect to catch some feeling for this in Osaka.

From the narrow perspective of the UK, the danger is that we will be caught in the crossfire between the EU and the US. From the wider perspective of Europe, the danger is that anything that restricts exports will push an already-slowing economy into recession. And from the widest perspective of the global economy, the danger is that the present reasonable freedom of trade worldwide will be weakened still further.

I don’t think we need to panic. We do, however, need to be alert.

The other great issue to look out for will be indications of Indian economic policy now that Narendra Modi has been re-elected so resoundingly. India has been the fastest-growing large economy in the world. I think this is wonderful, but I want to catch a feeling for the next directions of policy. The key issue is how open India will be to inward investment. It needs to be, but economic nationalism is pushing against it.

Finally, any feeling for the way in which the emerging world is coping with environmental challenges would be enormously welcome. The developed world will gradually tackle its pollution, emissions levels, and energy use. You can argue, many people do, that it is doing so too slowly, or has the wrong priorities. But there is movement. What China, India and to some extent Russia, do is in many ways more important. There is movement in China, but it and India are more directly threatened. The cities of the Indian subcontinent have some of the lowest air quality in the world.  

There is a huge amount to be done. The G20 is only a forum for debating how that might be done. But it is better than nothing – the best we have got – and we should respect and listen to what emerges.