Chilean President Sebastian Pinera canceled the Asia-Pacific Economic Cooperation summit that was to be held in Santiago on November 16-17.
It now remains unclear whether another host can be found in time to enable COP25 to go ahead as planned in December, or whether the crucial talks will have to be delayed.
The suspension spurs worries over the timeline of a "Phase One" trade deal between the US and China, which was widely expected to be signed by the leaders of the two countries on the sidelines of the forum, originally scheduled to take place November 16-17.
Clashes between protesters and security forces, which were sparked by a hike in metro fares in the country's capital, have spread nationwide, leaving at least 18 people dead and leading the government to declare a state of emergency and impose curfews.
Think tank Eurasia Group said in a Thursday note that "With Santiago now off limits, the two sides will need to seek a new third and neutral-venue or potentially a bilateral site for the meeting". The capital city's metro public transport suffered almost $400 million (€359 m) in damages.
The cancellations are a further blow to Chile's much-vaunted image as one of the most stable countries in Latin America.
With Mr Pinera's popularity at an all-time low, Chileans were calling for new protests and the United Nations was sending a team to investigate allegations of human rights abuses. Washington had hoped that Presidents Xi and Trump would sign a final trade deal at the conference and say they still "look forward to finalizing phase one of the historic trade deal with China in the same time frame".
Gidley said as of now there was no replacement location.
U.N. Climate Change Executive Secretary Patricia Espinosa issued a statement saying that "alternative hosting options" were being explored. Those would include cities such as New York, Geneva, Bonn, Vienna and Nairobi.