Meta's advertising business could suffer significant losses due to new tariffs against China promoted by President Donald Trump. According to analysts MoffettNathanson, the company risks losing up to $7 billion in 2025 due to reduced advertising spending on Instagram and Facebook by Chinese online retailers Temu and Shein, CNBC reports.
In a note to investors, analysts cited Meta's financial report, which states that the company earned $18.35 billion in China in 2024, more than 11% of its total revenue. The main advertisers are export-oriented companies, including Temu and Shein, which are actively promoting their business in the United States.
Temu has already started cutting advertising spending in the US after the new tariffs were introduced, which also caused the app to fall in the App Store. By the way, analysts also warn that if the economic situation worsens further and the US enters a recession, Meta could lose up to $23 billion in advertising revenue in 2025, which would reduce the company's annual profit by a quarter.