Meta at Risk of $23B Ad Revenue Loss as U.S. Tariffs Hit Chinese E-commerce Spend

Meta at Risk of $23B Ad Revenue Loss as U.S. Tariffs Hit Chinese E-commerce Spend

April 22, 2025 — The ongoing U.S.-China trade tensions are now hitting American tech giants, with Meta Platforms Inc. at risk of losing up to $23 billion in advertising revenue in 2025. The potential shortfall stems from Chinese e-commerce players like Temu and Shein scaling back their advertising budgets amid heightened tariff pressure from the Biden administration's trade policy.

According to a recent report by MoffettNathanson, Meta—whose ad business in China generated an estimated $18.35 billion in 2024, or more than 11% of its total global revenue—is particularly exposed, despite its platforms being blocked in mainland China.

Chinese E-commerce Cuts Advertising – Meta Feels the Impact
After U.S. President Donald Trump reinstated aggressive tariffs on Chinese imports in April, companies like Temu and Shein, which rely heavily on Facebook and Instagram for global ad distribution, began pulling back their ad spending significantly. Temu’s ranking in Apple’s App Store has also dropped notably since the tariffs were announced.

Should this trend continue, MoffettNathanson estimates that Meta could lose over $7 billion in ad revenue by the end of this year alone—and as much as $23 billion if the trade standoff persists through 2025.

China: Meta’s Second-Largest Revenue Source
Although Meta does not disclose country-level ad revenue in detail, analysts believe that China is its second-largest market, trailing only the United States. This underscores a paradox: Meta generates billions in revenue from a country where its core platforms are not even accessible due to internet censorship.

This revenue dependence has highlighted a structural vulnerability in Meta’s business model. Since Trump’s return to the White House in January 2025, Meta’s stock price has fallen nearly 19%, closing at $499.36.

Double Threat: Trade War Meets Ad Cycle Downturn
In addition to geopolitical headwinds, Meta is also facing cyclical weakness in global ad markets. Chinese brands are tightening their marketing budgets in the U.S., compounding the pressure. As a result, some institutional investors and analysts have already downgraded Meta’s 2025 earnings projections by up to 25%.

Meta has not yet responded to requests for comment on the matter.