Meta may take a $7 billion hit this yr on account of Trump’s tricky China price lists

Meta’s core web advertising industry may take a $7 billion hit this yr because of President Donald Trump’s tricky China price lists impacting shops within the nation.

That’s in line with a MoffettNathanson analysis be aware revealed Tuesday that analyzes the prospective have an effect on of China-linked shops like Temu and Shien slashing their Facebook and Instagram promoting budgets amid the U.S. and China industry dispute.

The MoffettNathanson analysts pointed to Meta’s newest annual record during which the corporate printed that its China income used to be $18.35 billion in 2024, equating to just a little over 11% of overall its overall gross sales. Like different analysts, MoffettNathanson consider Temu and Shien include the majority of Meta’s China industry, and if the ones on-line shops scale back on their advert campaigns this yr, the social networking massive’s 2025 advert gross sales might be impacted via $7 billion.

Meta didn’t right away reply for a request for remark.

There are already indicators of a pullback, the analysts wrote, mentioning a CNBC record about Temu decreasing its U.S. promoting spending and seeing a large drop in its Apple App Store scores following Trump’s China price lists.

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

Meta might be in much more hassle if the wider markets heads right into a recession this yr, as some analysts and company monetary chiefs have predicted. A “truly prolonged economic downturn” blended with the U.S. and China industry dispute “could wipe $23 billion in 2025 advertising revenues off Meta’s books and crush our 2025 earnings by -25%,” the analysts stated.

“As noted earlier, we believe Meta is particularly exposed to a pullback in ad spend from Chinese advertisers,” the analysts stated. “In a scenario where a recession is triggered or exacerbated by escalating trade tensions, Meta would face a dual headwind: cyclical advertising weakness and a targeted decline in Chinese ad spend.”

The MoffettNathanson analysts nonetheless care for a Buy ranking on Meta, stated they’ve however diminished their goal worth via $185 to $525.

Meta stories its first-quarter profits subsequent Wednesday.

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