Trump asked to postpone meeting with Xi Jinping over war. How does this threaten stocks?

US President Donald Trump said the White House has asked to postpone his planned meeting with Chinese President Xi Jinping in Beijing by about a month because of the ongoing war with Iran. Morgan Stanley analysts warned that delaying the summit between the leaders of the world's two strongest economies could send Chinese stocks down 10%.

Donald Trump emphasized that the request to postpone the meeting was solely due to the need to be in the U.S. during the war, CNBC reported.

"We are negotiating with China. I would love [to go], but because of the war, I want to stay here. I believe I should be here," Trump said Monday while speaking to reporters. - I'm looking forward to meeting him [Xi Jinping]. We have a very good relationship."

Trump was expected to travel to Beijing in late March. Earlier, senior Trump administration officials, including the president himself, had already warned that the war with Iran could affect plans to hold the summit in China, CNBC recalls.

In an interview with the Financial Times on Sunday, Trump said China - one of the biggest buyers of Iranian oil and an opponent of the war - should help the United States lift a de facto blockade of the Strait of Hormuz, a key route for global energy trade. Trump said he wanted to know Beijing's position on the issue before the meeting. "We can postpone [the meeting]," the US president noted.

On Monday, U.S. Treasury Secretary Scott Bessent stressed on CNBC that the possible postponement of the meeting could only be due to organizational reasons. "It's not because of the president demanding that China control the Strait of Hormuz," he noted. Bessent was meeting with Chinese counterparts in Paris over the weekend to prepare for the summit.

Trump's statement came amid rising tensions between the world's two largest economies, CNBC writes. The occasion was the war with Iran and a new US investigation into China's trade policy.

Morgan Stanley believes the postponement of the summit between President Donald Trump and Xi Jinping could trigger a sharp decline in Chinese stocks. "We view the upcoming summit between the leaders of the U.S. and China as an event rife with possible market drivers, and the situation surrounding Iran complicates both the possible outcomes of the meeting and the potential stock market reaction," MarketWatch quoted Morgan Stanley analysts led by Laura Wang as saying in a Sunday note.

According to the bank, if the summit is canceled or postponed, fears of accelerating inflation will increase, which will lead to a slowdown in global GDP growth. In this case, analysts expect Chinese indices to correct, but by no more than 10%.

"The possibility that the U.S.-China summit could be delayed by one month could also be taken as a signal that the [U.S.] war with Iran is likely to drag on longer than expected. This will affect equity markets," warned Hideyuki Ishiguro, senior strategist at Nomura Asset Management, as quoted by Bloomberg.

This article was AI-translated and verified by a human editor