Meta Platforms Inc. is facing significant revenue challenges as increasing U.S. tariffs on Chinese imports push Chinese e-commerce giants to curb their digital advertising budgets. Among these is Temu, a major Meta advertiser, which recently cut its ad spend on Meta and other platforms by 31% in response to escalated tariffs under the Trump administration.

Temu’s reduction is significant given its previous estimated annual expenditure of $1.2 billion on Meta's advertising services alone. This cutback reflects a larger trend within the industry, where analysts predict U.S. social media ad spending could drop by up to $10 billion by 2025 due to these tariff pressures. Meta and Amazon are expected to be among the most affected companies if this trend persists.

Aside from tariff-induced challenges, Meta is also navigating regulatory pressures. An ongoing FTC antitrust case adds to the headwinds for Meta's advertising segment, which constitutes approximately 10% of its total revenue. These combined factors underscore the mounting pressures on Meta’s core business operations and strategic adjustments it may need to consider in light of these economic and legal hurdles.