[Spark VC Weekly Insight] Rising Trade Tensions and Their Ripple Effects on Global VC Strategy

The U.S. and China have exchanged a new round of trade accusations this week, with the U.S. reportedly preparing additional tariffs on Chinese EVs and solar tech, while China signaled possible retaliatory duties. These moves cast new uncertainty over global investment planning and supply chain stability.

Implications for VC & Startups

• Hard-tech Startups Face Sourcing Risk

Many early-stage clean-tech or AI hardware ventures source components such as lithium batteries, chips, or specialized sensors from China. New tariff threats or export controls may delay prototyping or increase BOM (bill of materials) costs, which puts pressure on timelines and capital.

• Diversified Market Entry Plans Recommended

Startups focusing on a single export market (e.g., the U.S. or China) are now more vulnerable to policy shifts. VC firms are encouraging portfolio companies to explore ASEAN, MENA, or Latin American markets, while building logistics and legal capacity across multiple regions.

• Strategic Delay in Capital Deployment

As macro risks increase, investors are spacing out funding rounds, waiting for regulatory clarity or cost stabilization before committing large sums. This trend favors startups that can demonstrate near-term traction or flexible cost structures.

Navigating geopolitical risk is now part of startup strategy. We advise founders to build multi-region contingency plans and maintain strong investor communication as the macro picture shifts.