How is a Christian supposed to fear God when "there is no fear in love" (1 John 4:18)?

If you love someone, you don't want to disappoint them, but to make them happy.
You also don't want to disappoint someone if you are afraid of their reaction.

The first is defined as "fear of God", perhaps because of the similarity with the second motivation. In Old Testaments, the distinction between these two wasn't very strict, God was more tolerant to "fear of Him" in the latter sense - one of the reasons why "proper reverence to God" was associated with fear.

Jesus has shown us (much better than anyone in the Old Testament) that God is Love, and that proper "fear of God" (the OT term was still used) must have its roots in love, not in fear. John emphasizes this a lot - 1John 4:18 is one of the cases of this commandment.

1John 4:18 There is no fear in love; but perfect love casteth out fear: because fear hath torment. He that feareth is not made perfect in love.

perfect = teleioō = to complete, accomplish, or finish

1 Corinthians 13:4-7 The love is long-suffering, it is kind, the love doth not envy, the love doth not vaunt itself, is not puffed up, doth not act unseemly, doth not seek its own things, is not provoked, doth not impute evil, rejoiceth not over the unrighteousness, and rejoiceth with the truth; all things it beareth, all it believeth, all it hopeth, all it endureth. - YLT

We might see from the Biblical definition of love that it could be encapsulated by the word selflessness.

The process of perfection or completion of love may not be achievable without the indwelling of the Holt Spirit.

Galatians 5:22-23 And the fruit of the Spirit is: Love, joy, peace, long-suffering, kindness, goodness, faith, meekness, temperance: against such there is no law;

In the Old Testament the Israelites were supposed to start this process in fear;

Psalm 111:10 The fear of the LORD is the beginning of wisdom: a good understanding have all they that do his commandments: his praise endureth for ever.

A real fear of God and what he could do means that you think God is real and able to act. One might call this a prelude to faith. The admonition to fear the Lord might be also defined as an admonition to keep seeing God as real.

We know that the law was supposed to introduce the idea of a need for a Savior.

Galatians 3:24 Wherefore the law was our schoolmaster to bring us unto Christ, that we might be justified by faith.

The admonition to fear the Lord is also a beginning of a process. This process is completed in love.

Galatians 5:14 For all the law is fulfilled in one word, even in this; Thou shalt love thy neighbour as thyself.

Fear is a useful tool to know thew reality of God. However, as we grow in knowledge, and come to trust in Jesus and receive his Spirit in us, we grow ever closer to a loving Lord where fear is no longer needed. As love nears completion, fear fades as no longer necessary.

It's important to remember that in the Old Testament, God was giving the nation of Israel a law that they had to follow. The law they had to follow had blessings and curses based on how they, as a nation, followed the law. This is what we see throughout the whole Old Testament. God gives a law, the Israelites break it, he punishes them. Over and over and over again. So in the Old Testament, law paradigm, we find that a national fear of God in a theocracy is a very healthy and normal thing. It does, indeed, have to do with punishment.

There's a contrast however, once the Old Testament Law was fulfilled by Christ. He accomplished all that was in the law perfectly, doing everything the law required. Because he accomplished all that is within the law, satisfying God's demand for perfection, and because of his sacrifice, which he did not deserve and which was given for our freedom, we are no longer are bound by the law (Galatians 2:19, Romans 7:4). So we are no longer bound under the same fear that would have driven the Israelites in the Old Testament. Our fear is replaced by the confidence that Christ has already accomplished all that needs to be accomplished, and in his words, truly, "it is finished."

When we see that it is truly finished, that Christ accomplished the law, we see that we've been set free, and we are no longer accountable to the law on account of Christ's sacrifice on the cross. Being accountable to no law now frees us to release our fear and live instead in joy and gratitude.

1 Peter 2:17

As for the statement in 1 Peter 2:17, stating to fear God, it's important we see the whole context of this verse. Peter was just exhorting Christians to be subject to the laws in their land. This verse is a verse of contrasts, and the contrasts are put together in pairs:

Honor everyone - Love the brotherhood.
Fear God - Honor the emperor.

The statement here is drawing a contrast between how we ought to respond to those within the church and those outside the church, and also how we should respond to earthly leaders, in contrast to how we should respond to God.

We are to honor everyone, but we should love the brotherhood. That is, our first allegiance is to those within the church, and afterwards, we do our best to honor those who are outside the church. Likewise, our first allegiance is to God (hence the Fear God) part, but we should honor the emperor. While we seek to live at peace with everyone, Peter is laying out the priorities here by use of contrasting words. I'm not convinced he's saying that we are to live in abject fear of God, as though we are terrorized or afraid of his punishment. He's simply stating that our respect for God is over against that of the emperor, and likewise the needs of the members of the church is over against those not within the church. Note that in the verse before, he states that we are to live as people who are free, but not using our freedom as a cover-up for evil. He says nothing to the point of punishment if we do. The freedom is still ours, but his encouragement is that we use it properly.

We see a similar statement in Colossians 3:22:

Bondservants, obey in everything those who are your earthly masters, not by way of eye-service, as people-pleasers, but with sincerity of heart, fearing the Lord.

Again, here, he's saying that servants should fear the Lord and not be people pleasers. He's using the term fear in contrast to the term obey. Obey the earthly masters, but fear the Lord, not the other way around. Don't obey the Lord and fear your earthly masters. We should do things for the purpose of pleasing God, and not for the purpose of being seen by others.

Philippians 2:12-13

On another note, another "fear" verse is Phillipians 2:12-13:

Therefore, my beloved, as you have always obeyed, so now, not only as in my presence but much more in my absence, work out your own salvation with fear and trembling, for it is God who works in you, both to will and to work for his good pleasure.

So now we're saying to work out our salvation with fear and trembling? Why is this?

After salvation, the major focus of the Christian should continue to be to avoid falling into a legalistic frame of reference when it comes to living out the Christian life. To fall into a legalistic frame of reference is to be living by the law, and not by the Spirit. Doing this implicitly rejects the value of the cross, and is an implicit statement that what Christ has accomplished isn't enough, but that we have to add stuff to it. Our fear should be of minimizing the cross in that we fail to realize it's worth, not that we wouldn't perform everything according to the law properly, and thus get punished. In Christ, we won't.

The answer to your question is actually very simple. In the Bible there are 2 MAIN kinds of the Fear of the Lord. There is an unholy fear of God that makes a person to run away from God and there is a Holy Fear of God that makes a person run to God. Learning to distinguish between a Fear that you must have and a fear that you MUST NOT have is 1 of the first baby steps that we must learn if we want to grow in Christ and in our walk with God.

I will give you 1 example: in Exodus 20:20 Moses tells the people: Do not fear (do not have the unholy fear that makes people run away from God"; for God has come in order to test you, and in order that the Fear of God (the Holy Fear of God that makes people run towards God) may remain with you, so that you may not sin.

Unfortunately, we live in a time when almost all Christians (including preachers) has lost the Fear of God and have no clear understanding of what it is.

There are over 40 blessings and promises of God that only come on those who Fear God. Salvation is near to those who Fear God.