Trump Tariffs Threaten Meta's China Ad Revenue by $7B

According to CNBC, Meta's core advertising business could face a potential loss of up to $7 billion this year due to the impact of former President Donald Trump's tariff policies on Chinese retail companies.

In a recent report published on Tuesday, independent U.S. research firm MoffettNathanson revealed that ongoing trade tensions may prompt China-linked e-commerce platforms—such as Temu and SHEIN—to significantly reduce their advertising budgets on Meta platforms, including Facebook and Instagram. This shift poses a serious risk to Meta's advertising revenue.

Meta's latest annual report shows that its revenue from China in 2024 reached $18.35 billion, accounting for just over 11% of the company's total global income. MoffettNathanson analysts, echoing the views of other industry experts, believe that Temu and SHEIN make up a substantial portion of Meta's China-related business. Should these companies proceed with slashing their ad spending, Meta's ad revenue could decline by as much as $7 billion in 2025.

The report also pointed to early signs of this trend. Citing CNBC, analysts noted that Temu has already begun cutting back on U.S. advertising following the implementation of new tariffs. This has been accompanied by a noticeable drop in its ranking on the Apple App Store.

“The strategic significance of the Chinese market to Meta’s business cannot be overstated. While Meta does not disclose country-specific data for European markets, it is reasonable to infer that China stands as Meta's second-largest revenue source after the United States,” the analysts added.

As of now, Meta has not issued any public comments regarding the report.