Asian businesses are redirecting their sales strategies toward non-U.S. markets and scaling back advertising targeted at American consumers.
Some “Big Tech” companies are starting to feel the heat from President Donald Trump’s revived trade war, with advertisers from a key region starting to pull back on spending amid rising trade uncertainty.
Meta (META) CFO Susan Li told analysts on Wednesday that "Asia-based e-commerce exporters" have reduced their spending on its social network, and there is uncertainty regarding ad sales from the region in the near term.
The comments from Meta, which earns the majority of its revenue from digital ads it runs on its platforms, including Facebook and Instagram, are the latest fallout from Trump's unprecedented and dynamic trade policy.
The U.S. has imposed sweeping tariffs, although some are paused for now, with particularly high rates on imports from China. The Asian nation has imposed high retaliatory tariffs, effectively making trade between the two nations unavailable.
The U.S. is also ending this week a trade exemption that allowed goods valued at $800 or under from China to enter America without customs duties, a tool widely used by e-commerce companies, especially Chinese platforms Temu and Shein.
The changes are likely forcing Asian sellers to focus sales efforts on non-U.S. markets and reduce ads that target American consumers.
"A portion of that spend has been redirected to other markets, but overall spend for those advertisers is below the levels prior to April," Li said.
"It's very early, hard to know how things will play out over the quarter, and certainly, harder to know that for the rest of the year."
Meta's comments echo those from Alphabet, which said last week that it expects headwinds in its advertising business, particularly in the Asia-Pacific region.
Meta and Alphabet reported strong first-quarter results fueled by strength in their respective ad businesses. Their shares are down 6.2% and 15.5%, respectively, so far this year.
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