Trade policy among the G20 has emerged as one of the challenges the group faces during the last decade after the 2008 global financial crisis. This paper aims at analyzing the current trade disputes between China and the United States and the efforts the G20 has taken to settle these disputes. The fundamental questions this study attempts to answer are as follows: (1) what the US–China trade dispute means for the world trading system? (2) what the G20 can do to prevent destructive trade wars? We confront this view by critically examining a large body of evidence on the effects of trade policy on economically important outcomes. We begin with a discussion of the role of G20 in stabilizing world economy. We show the G20’s recent economic and trade development challenges and measurements of trade policy and identification of its causal effects. We present the trade balance between the United States and China. We also illustrate the efforts made by the G20 in promoting the development of China–US trade cooperation. Data were collected from different sources. Data are collected from the World Bank, the World Trade Organization (WTO) publications, and the G20 summits’ reports. The results show that the United States has a trade deficit with China, and the global growth would be notably curtailed as investment and consumer spending fall back. The G20 should focus on supporting the WTO, being upfront about the mixed effects of trade and investment, and improving G20 measures to tackle protectionism.
