Trump’s tariffs: Alphabet flags ad revenue risks in Asia-Pacific

Alphabet, Google’s parent company, warned that new US trade policies could challenge its ad business, especially in Asia-Pacific.

During an investor call on April 24, 2025, executives expressed concerns about the macroeconomic environment and its possible effects on ad spending, particularly in the Asia-Pacific (APAC) region.

The company exceeded Q1 2025 revenue expectations but remains cautious as tariffs on imports under US$800 will rise from US$25 to US$50 by June 2025.

Alphabet’s Chief Business Officer, Philipp Schindler, noted specific challenges for the company’s ad business from APAC-based retailers due to these changes.

Retail accounts for an estimated 21% of Google’s ad revenue, and Chinese platforms like Temu and Shein are reducing spending due to tariff-related pressure.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ Tariffs create a double impact on tech giants, both direct costs and reduced ad revenue

For companies like Alphabet, the tariff impact extends beyond just higher prices for data center equipment and AI infrastructure.

The reduced advertising spend represents a potentially larger threat, with surveys showing 94% of U.S. advertisers expressing concern about cutting ad budgets due to tariff-induced economic uncertainty 1.

The industry was already bracing for this impact, with U.S. advertising revenue growth forecasts downgraded from 4.5% to 3.6% for 2025 specifically due to tariff concerns 1.

Historical context is important: the U.S. is experiencing its highest tariff rates in nearly 90 years, affecting an estimated $2.2 trillion in trade across multiple sectors 2.

For tech companies dependent on advertising revenue, this represents a challenging environment where they face both increased costs for their own operations and decreased revenue from clients who are tightening their marketing budgets.

2️⃣ APAC retailers face disproportionate impacts from new tariff policies

Google’s specific mention of headwinds from “APAC-based retailers” reflects a targeted impact on companies like Temu and Shein, which had become major digital advertising spenders in the U.S. market.

The change to the de minimis exemption directly affects these companies’ business models, as they relied heavily on duty-free imports of packages under $800 in value, a practice now subject to duties of $25-50 per item.