Meta’s ad business could take a $7B hit

The tit-for-tat tariff war between the US and China could wipe out up to $7 billion in potential revenue from Meta’s advertising business this year, as Chinese brands reduce ad spending on its social media platforms, according to a new MoffettNathanson report.

This could deliver a significant blow to Meta, which earned $18.35 billion from Chinese advertisers in 2024. That figure accounted for 11% of its total revenue—even though Meta’s platforms remain blocked in China.

The report details that major Chinese retailers like Temu and Shein have slashed their ad budgets on Facebook and Instagram, where they’ve been heavy spenders.

Analysts warn that if a recession coincides with the ongoing trade tensions, Meta’s ad revenue could plunge by $23 billion in 2025, with earnings dropping by 25%. The company’s shares have already fallen 19% since President Donald Trump returned to office.

Other platforms like TikTok, Snap, X and YouTube are also seeing declining ad revenue from Chinese companies. According to Sensor Tower estimates, Temu spent 31% less on ads on these social media sites in the past month.