Why Trump’s Tariffs Are Rattling Even Meta
Mike Isaac, writing for The New York Times: Apple, Dell, Oracle — which rely on hardware and global supply chains that are in the direct line of fire from tariffs — saw their shares go into free-fall. But there was another big tech company whose stock took a pummeling even though its core business has little to do with hardware: Meta. [...] The effect of tariffs on Meta’s ad business is simple. Many of its small and medium-sized advertisers are from all across the world. President Trump’s tariffs will instantly make it more expensive for them to sell their products to customers in the United States. [...] Last year, the company disclosed that 10 percent of its revenue in 2023 was from Chinese companies spending heavily on advertising across Facebook and Instagram, an ad blitz aimed at garnering a foothold in lucrative Western markets. Much of that growth was fueled by the explosive expansion of the fast-fashion company Shein — which is based in Singapore but has a supply chain that is largely in China — and the e-commerce app Temu, a low-cost, Amazon-like company owned by the Chinese e-commerce conglomerate Pinduoduo. Temu was estimated to have spent $3 billion in marketing costs in 2023 alone, according to estimates from Bernstein Research. When the stock market began crumbling after Trump’s announcement Wednesday, I didn’t get why Meta was being hit so hard. Meta makes devices, but unlike Apple, that’s just a side hustle. Meta isn’t a retailer like Amazon. But Meta is a huge advertising destination for retailers. It’s all interconnected. ★
Mike Isaac, writing for The New York Times:
Apple, Dell, Oracle — which rely on hardware and global supply chains that are in the direct line of fire from tariffs — saw their shares go into free-fall. But there was another big tech company whose stock took a pummeling even though its core business has little to do with hardware: Meta. [...]
The effect of tariffs on Meta’s ad business is simple. Many of its small and medium-sized advertisers are from all across the world. President Trump’s tariffs will instantly make it more expensive for them to sell their products to customers in the United States. [...]
Last year, the company disclosed that 10 percent of its revenue in 2023 was from Chinese companies spending heavily on advertising across Facebook and Instagram, an ad blitz aimed at garnering a foothold in lucrative Western markets.
Much of that growth was fueled by the explosive expansion of the fast-fashion company Shein — which is based in Singapore but has a supply chain that is largely in China — and the e-commerce app Temu, a low-cost, Amazon-like company owned by the Chinese e-commerce conglomerate Pinduoduo. Temu was estimated to have spent $3 billion in marketing costs in 2023 alone, according to estimates from Bernstein Research.
When the stock market began crumbling after Trump’s announcement Wednesday, I didn’t get why Meta was being hit so hard. Meta makes devices, but unlike Apple, that’s just a side hustle. Meta isn’t a retailer like Amazon. But Meta is a huge advertising destination for retailers. It’s all interconnected.
