The magnitude of a drop in digital ad spend on these platforms depends on the extent of a spending pullback by China-based merchants, the brokerage said.
Trump on April 2 signed an executive order eliminating duty-free treatment for low-value imports from China and Hong Kong, or those worth at or under $800. The move closes what the White House considers "a loophole" in the tariff system, effective May 2.
Last week, the White House announced tariffs on several countries, including China, which responded with its own retaliatory tariffs on US products. Trump on Monday threatened additional 50% tariffs on China unless Beijing reverses its retaliatory actions.
Deutsche Bank analyst Ben Black said that ad spend on Google, Meta and Pinterest by Chinese merchants will likely decline by $2.1 billion if the new policy reduces marketing budgets by 30%. That figure rises to $3.5 billion if the ad spend reduction reaches 50% and to $4.9 billion assuming a 70% cut.
Last year, imports covered by the "de minimis" exemption had a total gross merchandise value of $65 billion, according the brokerage.
"We calculate that Meta has the most exposure to China in-bound digital ad spend," roughly $18 billion globally, "though its customer base is well diversified with (two-thirds) of spend coming from advertisers outside of the top 10 in the region," Black wrote.
Chinese e-commerce players like Temu and Shein spent roughly $4 billion on digital ads in the US on Meta last year, or about 2.5% of the Facebook parent's total advertising revenue.
For Google, that figure was about $3 billion, or roughly 1% of the company's total revenue, the analyst said. Pinterest's exposure was estimated at $60 million, or 1.5% of its 2024 revenue.
"We estimate that ($7 billion) was invested in US digital advertising from China-based merchants utilizing the de minimis loophole in 2024, which now stands at risk given last week's foreign trade policy changes," Black said.
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