Trump Postpones Beijing Summit as Iran War Undercuts China Leverage
May 14-15 meeting with Xi comes after Supreme Court tariff ruling eliminated key negotiating tool, reshaping balance of power ahead of talks on chips, Taiwan, and trade.
The White House confirmed March 18 that President Donald Trump will meet Chinese President Xi Jinping in Beijing on May 14-15, a five-week delay from the originally scheduled late March dates as the administration prioritises its war with Iran. The postponement marks the first US presidential visit to China since 2017 and arrives at a moment when Trump’s negotiating position has been structurally weakened by a Supreme Court ruling that eliminated his primary tariff authority.
Trump announced the delay March 16, stating the administration needed to focus on Iran. “We are resetting the meeting. We’re working with China. They were fine with it,” he told reporters. Treasury Secretary Scott Bessent downplayed any connection between the postponement and demands that China police the Strait of Hormuz, attributing the change to “logistics.” But the timing reveals structural tensions: according to CNN, a Chinese source familiar with summit planning warned that major casualties of Chinese citizens or damage to Chinese assets in Iran could make Trump’s visit impossible.
The February 20 Supreme Court decision struck down Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose Tariffs, eliminating his 10% reciprocal and 10% fentanyl tariffs on Chinese goods. The ruling forced the administration to launch Section 301 investigations on March 11-13 targeting structural overcapacity in China and 15 other countries—a slower, more constrained process than unilateral IEEPA declarations.
Weakened hand on tariffs
The Supreme Court’s invalidation of IEEPA as a tariff authority fundamentally altered the negotiating landscape. By striking down Trump’s ability to impose tariffs unilaterally, the Court removed what had been his most potent leverage tool. “By invalidating IEEPA as a tariff authority, the Court has inadvertently rebalanced the bargaining space ahead of the visit,” wrote Zongyuan Zoe Liu, senior fellow for China studies at the Council on Foreign Relations. “Trump now enters the talks with one less unilateral lever at his disposal, a change that will not be lost on Chinese negotiators.”
The administration responded by initiating Section 301 investigations into excess capacity across multiple sectors, but this process requires extended timelines and faces procedural constraints. Meanwhile, the US-China tariff truce remains in effect through November 10, with the fentanyl tariff reduced from 20% to 10% under a November 2025 agreement that paused reciprocal tariff increases for one year. The bilateral trade deficit narrowed to $202.1 billion in 2025, down from historical averages, as trade flows hit their lowest level in six years, according to The Wire China.
Chip controls enter new phase
Semiconductor export controls represent a second major negotiating front where the administration’s position has evolved. The Bureau of Industry and Security revised its stance on advanced AI chips January 15, shifting H200 and MI325X export licensing from presumption of denial to case-by-case review. According to the Council on Foreign Relations, the cap is estimated at 1 million H200 chips annually to China.
Enforcement actions have intensified despite the policy shift. Applied Materials was fined $252 million February 12 for illegally exporting ion implantation equipment to China—the second-largest penalty in Commerce Department history, according to the East Asia Forum. The penalty signals continued scrutiny even as the administration moderates licensing frameworks ahead of the summit.
“Beijing will essentially be asking how high the fence will get and how big the yard will be.”
— Alfredo Montúfar-Helu, Managing Director, Ankura Consulting
Chinese Foreign Minister Wang Yi characterised 2026 as “pivotal” for bilateral relations and called for removal of “unnecessary disruptions” ahead of the summit, according to CNBC. China’s Foreign Ministry rejected the premise of US trade complaints entirely. “We oppose any form of unilateral tariff measures,” spokesperson Guo Jiakun said. “The so-called issue of ‘China’s overcapacity’ does not really exist and should not be used as a pretext for political manipulation.”
Taiwan and defence spending escalate
China’s military posture toward Taiwan has hardened in parallel with summit preparations. The Ministry of Finance proposed a 278 billion USD defence budget for 2026, representing a 7% increase with emphasis on Taiwan military capability, according to the American Enterprise Institute. The budget was unveiled during the Two Sessions meeting in early March, weeks before the summit delay was announced.
The Taiwan dimension adds complexity to summit negotiations. South China Morning Post reported Beijing had expressed frustration with what it viewed as insufficient US preparation that might limit the landmark summit to trade agreements while leaving diplomatic and security matters unresolved. The defence budget increase signals China’s willingness to advance military priorities regardless of bilateral engagement.
Iran war adds geopolitical layer
The summit delay exposes competing strategic priorities. China holds an estimated 1.2 billion barrels of onshore crude oil stockpiles as of January, sufficient for 3-4 months of demand, with seaborne imports through the Strait of Hormuz representing less than 50% of total oil shipments, according to CNBC. This positions China to weather short-term supply disruptions from the Iran conflict, but extended hostilities threaten Chinese assets and nationals in the region.
The postponement may paradoxically strengthen Beijing’s position by allowing both sides to sidestep complications related to US military action against China’s most important strategic partner in the Middle East. By delaying the summit, Trump avoids forcing Xi to publicly respond to US operations in real time while also buying space for tariff negotiations to develop under the Section 301 framework rather than collapsed IEEPA authorities.
- Supreme Court ruling eliminated Trump’s primary tariff tool, shifting negotiations to slower Section 301 process
- AI chip export controls moved to case-by-case licensing while enforcement actions intensified
- China increased defence budget 7% with focus on Taiwan military capability
- Summit delay allows both sides to avoid Iran war complications but extends uncertainty on trade framework
What to watch
The May summit will test whether the administration can secure concrete deliverables on chip export frameworks and tariff structures using slower, more constrained policy tools. Markets should monitor yuan volatility in the weeks before the meeting as positioning adjusts to shifting expectations. Semiconductor equities—including NVIDIA, Taiwan Semiconductor, and ASML—will react to any signals on licensing caps or enforcement intensity. Treasury yields may move on indications of whether tariff uncertainties will extend beyond the November truce expiration.
The Section 301 investigations timeline matters: if preliminary findings emerge before May 14, Trump enters with renewed leverage. If investigations lag, Xi negotiates from a position of relative strength. Watch for rare earth export control announcements from Beijing as a counter-lever—China has used this tool sparingly but retains pricing power. Finally, any Iran war escalation that damages Chinese interests resets summit probability entirely. The meeting happens if Tehran remains contained; it collapses if Chinese casualties mount.