Meta: Chinese retailers cut digital ad spend due to trade shifts

Chinese online retailers have reduced their advertising spending on Facebook and Instagram due to US trade policy changes, according to Meta’s chief financial officer, Susan Li.

These retailers, including Temu and Shein, are anticipating the end of de minimis trade exemptions for Chinese imports, effective on May 2, 2025.

These exemptions, which previously benefited companies like Temu and Shein, were revoked by an executive order signed by President Donald Trump in April 2025.

Analysts estimate these retailers contribute significantly to Meta’s projected US$18.35 billion in China-related sales for 2024.

In the first quarter, Meta’s advertising sales in the Asia-Pacific region totaled US$8.22 billion, below Wall Street’s US$8.42 billion expectation.

Li noted that although ad spending has shifted, overall spending remains below pre-April levels.

Li projected Meta’s second-quarter revenue to be between US$42.5 billion and US$45.5 billion, in line with analyst expectations of US$44.03 billion.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ Trade tensions disrupt established e-commerce advertising channels

The reduction in Meta’s Asia-Pacific ad revenue reflects a pattern we’ve seen throughout previous trade disputes.

When the US imposed steel and aluminum tariffs (25% and 10% respectively) in earlier trade tensions, e-commerce businesses were forced to reassess their marketing strategies alongside their supply chains 1.

Chinese retailers like Temu and Shein have been leveraging Meta’s platforms to reach American consumers at an unprecedented scale, contributing significantly to Meta’s projected $18.35 billion in China-related sales for 2024 2.

This spending pullback mirrors similar adjustments made during previous trade tensions, when affected companies redirected marketing budgets to more favorable markets or reduced overall spend to offset higher operational costs 3.

History shows that companies typically respond to trade barriers by seeking alternative growth channels, suggesting Chinese retailers may be shifting ad spend to regional platforms or reducing marketing investments while reorienting their logistics.

The impact extends beyond Meta, with Google and Snap reporting similar headwinds, indicating a broader advertising ecosystem disruption rather than a platform-specific issue 4.