Meta could lose $7 billion from advertising in 2025 by customs against China forstood by Trump

dou.eu 2 months ago

Analysts MoffettNathanson warningthat Meta could lose up to $7 billion in 2025 on advertising gross due to import duties imposed on China by the Donald Trump administration. The main origin of losses is the limitation of advertising spending by Chinese online retailers specified as Temu and Shein, who advance themselves mainly on Instagram and Facebook.

China's share of Meta's revenue

Meta's financial data show that in 2024 the company generated $18.35 billion in gross from China, which accounted for over 11% of full sales. Despite Meta's deficiency of authoritative presence in China, analysts estimation that this country may be the second largest origin of gross for the company – immediately after the United States. This is due to the large engagement of Chinese advertisers directing their campaigns to the American market.

Fall in advertising expenditure for Temu and Shein

This already limited advertising budgets in the US, which translated into a decrease in the application position in the App Store. akin actions can be expected from Shein if trade tensions persist. Experts point out that further exacerbated duties may importantly reduce the visibility of Chinese brands on Meta platforms and thus affect the company's revenues.

Risk of recession and forecast for 2025

MoffettNathanson besides warns that if there is simply a recession in 2025 and commercial tensions deepen, The meth could lose as much as $23 billion in advertising revenue, which would mean a 25% drop in yearly profits. Although analysts inactive keep a "buy" advice for the company's shares, they have lowered the mark price from $710 to $525. Meta's stock has already fallen by 19% since Trump's second U.S. president swearing in.

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