Episode 2: Tariffs, Trade Wars, and Cross-Border Strategy with Benjamin Qiu

In this timely and globally focused episode of Inside CVC, we sit down with Benjamin Qiu, an American lawyer and cross-border investment expert, to unpack the escalating trade tensions between the U.S. and China—and what they mean for corporate venture capital, startups, and innovation worldwide.

Benjamin brings a unique perspective shaped by decades of experience in Silicon Valley and China, and currently joins us from Tokyo. We explore the ripple effects of rising tariffs, the future of globalization, and how companies should be rethinking supply chains, data access, and international deal flow.

Whether you're a CVC leader, startup founder, or strategist navigating global markets, this conversation offers sharp insight into one of the most urgent business issues of our time.

Topics include:

• China’s evolving trade posture and industrial confidence
• How Asian corporates are responding to tariff volatility
• Risks to cross-border data, innovation, and venture investing
• What CVCs should prioritize right now—from cash preservation to global diversification

Transcript

Steve: 0:00

Today, we're diving into one of the most complex and consequential topics impacting markets worldwide, tariffs and trade wars. So this episode could not be more timely nor more relevant on a global scale. Joining Inside CVC today is somebody with a truly global lens, Benjamin Q. Ben grew up in China on a central government compound where most of his relatives and neighbors were central government officials working for the foreign ministry. He's worked and studied all over the world, and today he's a cross-border innovation and corporate law expert, and he co-chairs the Asian Affairs Committee for the New York City Bar Association. We interviewed Ben as the sun was rising on Asia Saturday morning, just as new tariffs were taking effect and making headlines on both sides of the Pacific and around the world. More changes and additional exemptions have been announced since we had our conversation. In this episode, Ben shares how firms across Asia are reacting, what the future of cross-border innovation might look like, and why supply chain diversification and early stage investment may be the key to long-term resilience. So wherever you're listening from, whether you're in the boardroom, on the commute, or catching up after hours, this is an episode of Inside CVC you won't want to miss. Let's get into it. Welcome to Inside CVC, a podcast series exploring the latest trends, business issues, and geopolitical disruption and uncertainty impacting the business of corporate venture capital. I'm your host, Steve Smith, and along with fellow host Philip Willigman, we're bringing together leaders in corporate venture capital, entrepreneurs, traditional venture capitalists and private equity investors, educators, and leaders in public policy to talk about how vast ecosystems of partners, from corporations to startups, are working together to to drive and scale cross-border open innovation. Our show is brought to you by UPath Advisors, specializing in corporate innovation and strategic growth and helping bridge the gap between corporations and startups in ways that drive sustainable growth. To learn more, visit upath.com. That's the letter U hyphen path dot com. Inside CVC. Insights helping shape tomorrow. Here's today's conversation with Benjamin Q. Ben, thank you for joining us today on the CVC podcast. Really excited to have you on the show. We're going to be talking about the trade wars. We're going to be talking about the tariffs. Certainly new news when you wake up every morning. So yeah, thanks for joining us on the show. Glad to be here. Thank you, Steve.

Philipp: 2:45

Ben, it's amazing to have you on. And, you know, we have met, I think, over two years ago, and I could not think about a better, you know, partner on this show talking about, you know, geopolitics. You've been at the CVC Summit this year, as well as last year, facilitating a fascinating conversation with various experts from different geographic regions. So, yeah, but tell us a bit about your background. And did you yourself to our audience.

Ben: 3:18

Sure. Well, I'm an American lawyer. Right now I'm sitting in Tokyo because I've been on a trip to this great city. But I'm originally from China. I was born in Beijing. I grew up in Beijing. I grew up on a central government compound where most of my relatives and neighbors were central government officials working for the foreign ministry. So I sort of had a childhood with early exposure to some of the worldly affairs. But then I completely grew up in Beijing, which is a fascinating city. Then I went to college studying computer science during the dot-com boom, if people still remember that. And I, at that time, already wanted to be a lawyer. So I went to law school in California. But then after I graduated and briefly worked in the Silicon Valley, the opportunities in Asia were already very attractive. There was a few years before the 2008 Beijing Olympics and a few years after China joined the World Trade Organization in 2001. All sorts of things were just exciting. As a young lawyer, I could influence policy, talking to regulators and courts on behalf of foreign business chambers. I handled a lot of significant cases on my Those were the things that a young lawyer, even at a big firm in America, wouldn't be able to do. And with those, I was working as primarily intellectual property, and after that, venture capital, private equity, sort of a Silicon Valley lawyer in China for almost 20 years. Essentially, my work was porting Western capital and technology to this large, homogenous, growing market, insatiable for technological growth. And here we are. The world is very different than 25 years ago when China joined WTO. Thank you.

Steve: 5:36

That is a fascinating background, certainly on a global scale. And I think global is going really to going to be a theme for today as we're recording this. As you said, you're in Tokyo. I am in the Midwest in the United States, currently 6 p.m. here. And it is about 1 a.m. where Philip is is joining us from. And as the sun comes up across Japan and across China, I understand that in your part of the world today, leather We've got a 10% import tax more broadly here on the U.S. on goods coming into the United States. I'm curious, Ben, how are Chinese firms and Asian corporates reacting to this? to this volatility.

Ben: 6:37

Generally speaking, of course, not good, especially if you are in manufacturing and import-export. Having said that, there's a little bit of a factor of we have been here, we're used to this, we can handle this. If you are a boss, you may be telling yourself and people around you to just take six months off and see how it goes because a lot of the orders especially from America, have been canceled. While China went through Trump 1.0 during his last term, where there was also a trade war, of course, they eventually settled. And the outbreak of COVID was probably one of the contributing factors of the truth. But this time, a lot of Chinese companies probably feel that, well, where we are, is a mutual rejection of trade. Of course, from their point of view, the current White House started this, and then China had to respond, and China made a decision to take a stance of being strong, T for Tat. And If that will continue, then the whole trade between China and the US will be killed. On the American side, we are right now, again, it changes every day, but right now we're probably looking at 145% on China's side. Well, I guess people are betting on the fact that China, especially from China's point of view, China could inflict so much pain that's immediate and direct on American consumers that America will probably fold at some point. The fact that two days ago, the White House backed down and applied the 90-day pause, not on China, but at least on the rest of the world, pause of the extreme number of tariffs because of what's happening at the treasury bonds market probably gave China a fantastic view of the vulnerability of Donald Trump. They probably feel that, well, we see at least one way how something could happen and make him fold. So for the time being, The extreme tariffs on both sides probably will continue, at least from China's point of view, they have not damaged many reasons to back

Philipp: 9:22

down. Sorry for interrupting you there, but just listening to some of the news in the United States, but also some of the media which comes over from China into Europe, It sounds like there is quite some strengths also in China. What I'm hearing here in Europe to say, we actually really don't care so much. I saw an interview today where somebody says, China, we've been around for over 5,000 years. The US has not. So we'll probably still be around the next 5,000 years. And there was some kind of tone I have not heard before Any thoughts from you on

Ben: 10:03

that? Well, China is having a lot of confidence right now. It doesn't necessarily mean that the confidence is not misguided, right? Because in our lifetime, Chinese population will go down by simple mathematics of 50%. And it's pretty amazing that unless America closes its door to immigrants, really closes its door to international immigrants, then in 40, 50 years, we're looking at the American population and the Chinese population roughly on par that's an amazing thing to see in our lifetime and but that's a long-term thing you know over the past 20 30 years china accumulated a lot of industrial strengths in terms of high-end manufacturing and um well import export manufacturing processes and um china is a world leader in many areas of technology these days i'll take um EV battery as an example. Of course, those batteries are not necessarily just used for EVs. It could be many other things, including grid management. China controls 80% of the EV production around the world. And we're not just looking at manufacturing. China produces about two-thirds of the top research papers in the battery area. And in part, as a result of that and other industrial strengths, Chinese companies can introduce new models of cars. I saw some numbers that 30 to 40% faster than the Western counterparts. Having said that, of course, Chinese economy has been in trouble for the past four to five years at least. In part because of the crackdown, very harsh crackdown by Beijing probably directly coming down from Mr. Xi over private entrepreneurs, private companies, all sorts of private industries. And in China, a cracking down is not similar to in the Western world, where there could be a new regulation and an industry gets affected. And even then, there are ways to go to court, to sue the government, to lobby legislators to make something happen. In China, a crackdown means your whole industry is wiped out and then millions of jobs are lost. Just during the past five years. We're looking at technology companies, private education industries, and you can just imagine how many millions of, especially white collar jobs have been eliminated in China. So the economy has not been good. So even though I mentioned that for the past 20 years, I was mostly happily doing cross-border technology investment deals involving China, I already moved myself and my family to the US around three years ago and well until then the market and government policies went crazy a few weeks ago at least generally since that Asian China-based entrepreneurs and investors have been mostly excited about the U.S., a lot of investments and people trying to move themselves, their family, their company, their funds to the U.S. to be part of the growth. That has been quite a phenomenon. So I've been busy and China has, for the time being, looked confident and there are some good reasons for that. But I suspect China could be overconfident.

Steve: 13:53

You talked about cross-border in sharing your perspective there. In a lot of what we talk about on Inside CVC is this notion of corporate venture capital and cross-border innovation. What do you see as particularly happening to that entire ecosystem as a result of this trade war? Whether it is specifically between trade, between the U.S. and China, or more broadly, we globally, and we think about intellectual property, we think about all these ideas and goods flowing across borders to drive innovation. What happens to that in this environment?

Ben: 14:33

Well, the short answer is that the direct result or people's reaction to the this enhanced trade war over the past few weeks, we don't know yet. Because corporate investment, all sorts of early stage or growth stage equity investments is for the long term. You're not investing in a company for the company to get bought tomorrow or go XPO in six months. You're doing that for the next three to five years or longer period of time. And especially when it comes to corporate investments, oftentimes you need to wait and see how your portfolio company have a synergy with your other business divisions, how your investment could contribute to the future R&D strengths of your parent company. So we don't know yet, but looking at the past several years, coupling with China has been ongoing. And in my direct world, the venture capital private equity investment into China from foreign US dollar denominated funds has already completely decoupled from the China market. There might be still some investors active looking for relatively quick returns, but in terms of US dollar investors in China, their opportunities have, if not evaporated, then largely replaced by locally based RMB denominated funds in recent years. Having said that, I'm aware that a lot of them Western manufacturing firms, large companies, especially manufacturing firms, including pharmaceutical life science, I'm not just talking about mechanical engineering and car industries, have seen China as an essential lab for R&D. In the China market, maybe more development than research, but like I mentioned, battery technology is one example, but also many other things consumer goods and China has a lot of engineering talent and institutions and European companies American companies have built a lot of R&D strengths those were not be quickly affected by the trade war. Like I said, a lot of people have good reasons to believe that maybe China and the US will settle tomorrow. You see how after these several rounds of escalation with China, Donald Trump already came out saying that well, she is a friend. I could talk to him and then we could come to some sort of settlement. So people may believe that it's all just going to just go away soon.

Philipp: 17:57

Ben, going to the next question and, you know, going with the same theme, but talking a bit about access, right? Do you think, you know, anything is going to change in terms of access? You know, a lot of US multinationals, you know, access to physical data center. It owns and operates in other parts of the world, for example. And also, if you think about, you know, going back to the topic of, you know, venture investing, you know, if there were deals in certain geographies which were pretty much done, the due diligence was done, everything was organized, decided, but the deal was not signed. Do you see kind of like in regards to also like closing some of the deals? Is there you know a last minute change gonna happen now with with the current environment uh out there we'd love to hear your thoughts on that

Ben: 18:51

right there are several questions here right i'll try to my best to go backwards um let's start with um The pending deals, of course, the market and the Washington DC policies these days creates a lot of uncertainty and investors hate uncertainty. And I see a lot of potential disputes happening when investors try to renegotiate, try to put a plug. As a lawyer, for more than 20 years, I've seen this quite often. And sometimes investors could make a decision that, well, the market condition has changed. All our deals that have been due diligence about, but not yet closed, need to be revisited, potentially revised, maybe dropped. I've seen that with a number of investors on the China market when all of a sudden there are bad news about a certain industry or all of a sudden a major institutional investor decided that probably all our deals, discussed deals, not yet closed over the past six months have been overvalued. So we're going to cancel all the term sheets and then At that time, what can a company do? Generally, not much. A term sheet is only a guidance of the deal. It's not a signed agreement. I do see that happening. Given a lot of the purchase orders have been canceled, the trade war is some sort of enforced measure from the point of view of the protection clause in legal documents. but to what extent globalization will be unwind because of this disruption we are not sure yet we see clearly a bifurcation of the trade world of the US block and the China block, of course, is very complex. So between US and China, there are still a lot of trade. But then over the past 10 years or longer, China has been building an alternative circulation of supply and markets, and the Belt and Road Initiative is just part of that. Other than that, China has tried to build diplomatic influence, especially over developing countries, but also Europe, all sorts of countries outside the immediate U.S. sphere. And the data trade could be greatly impacted because of the bifurcation. It's not because of the trade war, but more having to do with China's paranoia about control of data and information since around 10 years ago, China has required that any foreign companies, including multinational companies, handling any data in China, whether consumer data, sales data, and so forth, must stay in China. so much so that Apple eventually agreed, but it's been a while, this was between five to 10 years ago, to store all the iPhone data in China. So if you are... an iPhone user in China where the data is stored is very different than consumers in the rest of the world.

Steve: 22:57

Ben, why don't we close with advice for folks that might be listening to that. If you've got any insights, any recommendations to share. Obviously, this is impacting a wide group of, I think, regions and impacting companies across the value chain, up and downstream on the value chain. So if you put yourself in the shoes of CVC leaders and through the lens of what they need to focus on right now, what's the immediate next step? What's the near-term thing that they need to do?

Ben: 23:38

Sure. Well, there could be many things, but two things immediately come to mind. One is Supply chain diversification, that has been gradually happening over the past years, but that probably needs to accelerate because the bigger picture is we're looking at the end of Pax Americana. America has made a decision, at least for the time being and probably for the next few years, to stop providing public good globally. America has been doing that, which has been fantastic for all sorts of countries in the world since World War II. America has stopped doing that, well, in my opinion, which is probably a mistake. In the heyday of Roman Empire, in the golden age of Roman Empire, they provided public goods to glue the empire together, which created a value. Same with Pax Britannica, where the British Empire was providing public goods in terms of order and defense. And assistance for its allies, efficient improvement of governance of all sorts of the relevant territories. I'm not saying the empires in the history did terrible things oftentimes, but just purely from the point of view of having some means to facilitate stability, defense, and global trade, providing public goods wouldn't make sense even though it does create the free rider problem so American public probably have some good reasons to feel unhappy about some aspects of Pax Americana which I would argue is already over now um but um allowing some free rider could be you know worth it um during the roman time or the british empire there were free riders if america has put plug on this then the world became more uncertain and um you know all sorts of supply chain participants have to hatch for this. We're looking at a more chaotic world, which brings me to another point that this could be a time to invest in relatively early stage because if a lot of good talent, let's say from China, does not manage to come to study and work in America, then a lot of those people will end up in maybe Southeast Asia, maybe Japan, maybe a lot of them will go to Europe and Australia. I was talking about the Chinese students and scholars, but same thing with Europeans. I just saw some data from Financial Times that over the past two months, the number of visitors to America from European countries has nosedived by more than 30%. So if that's going to be the long-term future we're looking at, and then paradoxically, globalization, when it comes to CDC or other growth investments, would have to be more dispersed rather than focusing on overwhelmingly focusing on America. Maybe investors need to look at other places in the world for where talents may build exciting new companies.

Steve: 27:40

Well, it's interesting. I think you answered the second question or the second group of individuals I was hoping that you would provide some advice for. And those were the CVC leaders that were working with startups. But I think you already touched on it. Your point of view is look at those startups more aggressively, at least now, get in a at an even earlier stage because where we started this conversation, that those things take time to incubate. We're at least in this for the next few years. Who knows what happens beyond that? Is that fair?

Ben: 28:14

Yep, absolutely.

Steve: 28:16

What's the one piece of advice? Why don't we close with a one piece of advice you would offer to founders of startups that are navigating all of this?

Ben: 28:24

Oh, sure. Well, the immediate thing, if our founder in today's world is to preserve cash, to raise and close the funding deals as soon as you can, because the world is becoming less certain. Not to mention that there could be additional military conflict happening. Other than that, really, we just need to collectively, as a know founders or investors or you know service providers for this industry um just uh you know endure this and survive this uh so to speak um right we in the long term um probably would generally believe in americans um ability to correct itself to make progress to, even though sometimes making progress means doing so after you have moved backward in some ways. There are certain things are could be cyclical. Certain things will change forever. America, for the time being, now going back to the post-World War II world, is probably quite certain. China, facing extreme demographic nosedive, a lot more so even than Japan, is going to be quite certain for the next few decades. America retaining its strengths in diversity and ideas and innovation in immigrants in the long term probably will still be there. So betting against America could still be a mistake. I guess that would be my conclusion.

Philipp: 30:32

Well, Ben, thank you so much for the insights into this very critical and hot-off-the-press topic. Really appreciate you taking a call early in the morning in Japan and sharing your perspectives from Asia, from China, from the US perspective, and giving them tangible advice to our CVCs and founders. Really appreciate it. Thank you so much for coming on the show and handing it back to you, Steve.

Steve: 31:05

Absolutely. Ben, a fascinating conversation, certainly timely. I'm looking at the notes that I made and there were some scribbles here that I had not thought of before we got to this conversation. And so thank you for your time and your insight. Thank you for educating personally myself. I learned some things, a lot of things. And thank you for sharing your perspective with our audience.

Ben: 31:30

Thank you, Steve. Thank you, Philip. It's been a pleasure.

Steve: 31:32

That's it for today's show. Thank you for joining us. Special thanks to Ben. And remember, you can find and subscribe to Inside CVC on any of your favorite podcast platforms or by visiting upath.com. That's the letter U hyphen path dot com. We'll see you next time.