Chinese President Xi Jinping is preparing to host U.S. President Donald Trump against a backdrop of unresolved uncertainty around Iran, a dynamic that complicates both leaders' diplomatic calculus heading into the summit.

For Xi, the meeting is an opportunity to project stability at a moment when global trade tensions and geopolitical friction remain elevated. China has positioned itself as a steady hand in international affairs, and a high-profile visit from Trump offers a chance to signal that the world's two largest economies can manage their rivalry without open rupture.

Why Iran Clouds the Picture

Iran sits at the center of a difficult triangle. Beijing has maintained economic ties with Tehran, including oil purchases that U.S. sanctions formally prohibit. Washington has pushed China to scale back those ties, and any U.S.-China summit agenda is likely to include pressure on that front. At the same time, ongoing uncertainty around Iran's nuclear posture and potential U.S. or Israeli military action creates a volatile variable that neither side fully controls.

If tensions with Iran escalate sharply before or during the summit, it could force both leaders to recalibrate. A military strike, for instance, would spike oil prices, rattle Asian markets, and put Beijing in the uncomfortable position of having to publicly respond to an attack on a country it trades with, all while hosting the U.S. president.

What Xi Wants from the Meeting

China's immediate interest is economic breathing room. Sustained U.S. tariffs have pressured Chinese exporters, and Xi is likely seeking some signal, even a modest one, that trade hostilities could ease. A stable public image of U.S.-China relations also helps Beijing manage domestic expectations and reassures trading partners in Southeast Asia, the Middle East, and Europe that China remains a reliable anchor.

Trump, for his part, arrives with his own leverage calculus: tariffs as a bargaining chip, Iran as a pressure point, and an interest in projecting deal-making strength ahead of any domestic political considerations.

The summit's outcome will be watched closely for any concrete agreements on trade, technology export controls, or Taiwan, though the Iran uncertainty means the agenda could shift quickly depending on events outside both capitals' control. Markets will be sensitive to any sign of détente or breakdown, particularly in sectors exposed to U.S.-China tech and trade policy.