Meta Navigates Choppy Waters as Chinese Advertisers Pull Back Amid Trade Tensions

In the digital advertising world, Meta just got ghosted by some of its biggest spenders—and not in a cute, social media kind of way. Chinese e-commerce titans Temu and Shein are dialing down their ad dollars, leaving Meta to refresh its feed and rethink its strategy.

Meta Platforms, the parent company of Facebook and Instagram, is experiencing a notable decline in advertising revenue from Chinese e-commerce giants such as Temu and Shein. This downturn is attributed to escalating trade tensions and the revocation of a U.S. tax exemption that previously allowed low-cost Chinese goods to enter the American market duty-free.

The policy change, effective May 2, eliminates the de minimis exemption, which permitted goods under $800 to bypass import duties. In response, Temu and Shein have significantly reduced their U.S. advertising expenditures. Temu’s ad spending on platforms like Meta, X, and YouTube dropped by 31% in early April, with a complete halt on Google Shopping ads from April 9. Similarly, Shein’s ad spend decreased by 19% in early April and nearly halved compared to the previous year.

Despite these challenges, Meta reported robust first-quarter earnings for 2025, with revenue reaching $42.3 billion, surpassing analyst expectations. Net income rose to $16.7 billion, a 35% increase from the previous year. The company attributes this growth to its aggressive investments in artificial intelligence and infrastructure.

Meta’s CEO, Mark Zuckerberg, emphasized the company’s commitment to AI, highlighting the release of the Llama 4 model and a standalone AI assistant app. The company also launched the Llama API, a developer platform for building on its AI models. These initiatives are part of Meta’s strategy to diversify revenue streams and reduce reliance on traditional advertising.

While the reduction in Chinese advertising spend presents a short-term challenge, Meta’s strong performance in other areas suggests resilience. The company’s focus on AI and infrastructure investments positions it to navigate the evolving digital landscape and mitigate the impact of geopolitical uncertainties.

As of the latest trading session, Meta’s stock price stands at $549.00, reflecting investor confidence in the company’s strategic direction.

So while some ad dollars have vanished into the Great Firewall, Meta’s banking on artificial intelligence to keep the likes—and the revenue—rolling in.