Meta faces $7 billion ad revenue hit as Trump’s China tariffs rattle Temu and Shein

The Trump tariff launched on April 2—Liberation Day—continues to send shockwaves through global markets. The tech sector, which many thought would be shielded, is now clearly feeling the pressure. Apple, Nvidia, and Tesla have already taken a hit. Now, Meta’s in the crosshairs.

A new research note from MoffettNathanson says Meta could lose up to $7 billion in ad revenue this year as Chinese retailers start slashing their marketing budgets, CNBC reported. The fallout is tied to Trump’s sweeping China tariffs, which are already triggering major pullbacks from companies like Temu and Shein.

The news comes just a day after Nvidia reportedly lost $1.15 trillion in 3 months as Trump’s tariff on China rattled Wall Street.

According to Meta’s latest annual report, the company pulled in $18.35 billion from China in 2024—more than 11% of its total revenue. That’s a massive number for a country where Meta’s platforms are technically banned. But it makes sense: Chinese e-commerce giants have been using Facebook and Instagram to aggressively target American consumers with ads.

Now that those same companies are tightening their budgets, Meta’s ad business is looking a lot more fragile.

“China’s importance to Meta’s business cannot be overstated,” the analysts wrote.

They believe China is likely Meta’s second-largest revenue source after the U.S., a remarkable twist given Meta doesn’t actually operate there.

“While Meta does not provide a country-level breakdown of revenue within Europe, we logically can presume that China is Meta’s second-largest revenue source after the United States — a remarkable position for a country where Meta has no users or active platforms.”

The warning signs are already showing up. CNBC recently reported that Temu has started cutting back on U.S. ad spending, and its App Store rankings have dropped sharply since the tariffs took effect.

It gets worse. If the U.S. economy slips into a recession—something a growing number of analysts and CFOs are expecting—Meta could be staring down a perfect storm. The report estimates a worst-case scenario where Meta loses up to $23 billion in ad revenue in 2025 and sees earnings plunge by 25%.

The analysts didn’t mince words: “Meta is particularly exposed to a pullback in ad spend from Chinese advertisers.” A broader recession combined with escalating trade tensions would double the blow, cyclical ad weakness, plus a China-specific freeze.

Despite the gloomy outlook, MoffettNathanson still maintains a Buy rating on Meta, though they did lower their price target from $710 to $525.

Meta shares have already taken a hit. Since Trump was sworn in for a second term, the stock has dropped roughly 19%, down to $499.36. Investors won’t have to wait long for more clarity—Meta is set to report Q1 earnings next Wednesday.

Meanwhile, Meta isn’t the only tech giant feeling the sting of Trump’s tariffs. Nvidia said yesterday it expects a $5.5 billion revenue hit this quarter after it was forced to halt shipments of its H20 AI chips to China and other restricted regions. Investors didn’t take the news lightly—the stock tumbled 6% in after-hours trading.