Khamenei’s death raises questions about Trump’s China trip

BEIJING — Uncertainty is growing over U.S. President Donald Trump’s high-stakes trip to China after Washington targeted a second foreign leader in two months.

Trump announced over the weekend that joint U.S.-Israel strikes on Iran killed its Supreme Leader Ayatollah Ali Khamenei. In early January, the U.S. also captured Venezuelan leader Nicolas Maduro and his wife from their residence.

Analysts say those actions could complicate Trump’s high-stakes trip to Beijing.

“President Xi Jinping won’t feel easy about the death of the top leader of Iran,” said George Chen, partner at The Asia Group, noting Beijing’s relatively good relations with Tehran and Caracas.

“How can Xi feel everything is normal and alright and be prepared to welcome Trump to visit in [a] happy mood?” he said. Chen added that “investors should manage their expectations on what Trump can achieve for his China trip — if he still goes.”

Trump is scheduled to visit Beijing from March 31 to April 2, following a fragile trade truce with China reached in late October. It would mark the first trip by a sitting U.S. president since 2017.

But Beijing has yet to confirm the dates.

China’s Foreign Ministry on Sunday condemned Khamenei’s killing and called it “a grave violation of Iran’s sovereignty and security.” Beijing urged for an immediate ceasefire, although it was less direct about the U.S. role than it had been after Maduro’s capture.

“I worry the U.S. side might use Iran, if it’s going poorly, to delay the trip,” said a foreign business executive tracking meeting preparations very closely, who requested anonymity due to the sensitivity of the matter.

“I think the risk [of the trip falling apart] is on the U.S. side more than the Chinese side,” the executive added.

U.S.-based prediction markets signaled a greater likelihood of a delayed Trump trip.

As of late Monday morning, Polymarket showed a sharp drop in expectations that Trump would visit China by March 31, to 42%, from 83.9% on Feb. 21, while wagers on a visit by April 30 remained high at 81%.

Kalshi showed a slight drop in expectations that Trump would visit China by 2027, though it remained a high 91%.

While many analysts still expect the trip to proceed, it’s less clear how U.S. businesses will navigate plans for deals in the world’s second-largest economy.

Several U.S. executives had been expected to accompany Trump on his Beijing trip, following a pattern of business delegations following leaders of different countries on their trips this year to China in a bid to strike deals.

“Prior to the attack on Iran, many American CEOs were already unwilling to go with Trump to China. Now the situation is even more tricky,” according to an active member of the American business community in China, who also requested anonymity due to the sensitivity of the matter.

The White House and China’s Foreign Ministry did not immediately respond to a CNBC request for comment.

The Chinese readout so far indicates an “unusually softer tone,” said Jack Lee, analyst at China Macro Group. He expects Trump to visit Beijing as planned, but is watching whether Washington signals restraint on arms sales to Taiwan.

The democratically self-ruled island, claimed by Beijing, remains a central flashpoint in U.S-China relations.

Trump, meanwhile, told British newspaper the Daily Mail that U.S. strikes on Iran could last four weeks — a point that Chinese state media highlighted Monday morning. That timeframe would run into the planned March 31 start date for his trip to China.

“If the conflict escalates into a regional war beyond what the U.S. originally planned, it’s not impossible that Trump might delay the trip,” said Yue Su, principal economist at the Economist Intelligence Unit.

“Still, I expect Trump and [Xi] to have a phone conversation about this at some point,” she said. Her base case remains that Trump goes ahead with his China trip later this month.

China this week kicks off an annual parliamentary meeting, where top diplomat Wang Yi typically speaks to the press. In mid-February, Wang told U.S. Secretary of State Marco Rubio on the sidelines of the Munich Security Conference that the U.S. and China should work to expand areas of cooperation.

In foreign policy, Beijing has prioritized its own interests by forging bilateral ties while encouraging multilateral engagement. Official statements around past U.S.-China meetings have noted the need to create “conditions” for developing bilateral relations.

The U.S. actions in Iran have eroded trust between the two countries, said Dong Shaopeng, a senior researcher at Renmin University of China. While he still expects Trump and Xi to meet in a few weeks, he said he hopes the conflict does not spread to other countries in the Middle East.

State-affiliated Chinese columnist “Niutanqing” on Monday described the Iran “war” as more intense than the conflict in Ukraine, drawing several lessons. Of the several lessons from the turn of events, the columnist said that Khamenei’s death revealed “traitors” can emerge from within, and that negotiations may conceal the true intentions of an adversary, according to a CNBC translation of the post in Chinese.

If the Trump-Xi meeting proceeds as planned, it could offer an opportunity for broader peace talks while addressing strained U.S.-China relations.

“The issues that they have to work out, China-U.S. trade, are pretty important, and the meeting has been scheduled to be in place for a long time, and so cancelling it would be pretty radical at this point,” said Gary Dvorchak, managing director at Blueshirt Group.

“I don’t think it would … help the situation to cancel the meeting for any reason.”