Meta, Amazon, and lots of tech firms will be indirectly harmed by tariffs, too
There aren’t tariffs on digital goods yet, but advertising — and by extension tech companies — will certainly feel the pain.
Tariffs are terrible for companies that sell physical products. They’re also bad news for the companies that make money advertising those products — even if digital services aren’t subject to tariffs.
That’s because when there’s economic turmoil, advertising budgets are the first to go.
That pain could be most strongly felt by American tech companies like Google, Meta, and Amazon, which eMarketer previously forecast would bring in a combined $462 billion in digital ad revenue. Relatively smaller ad-supported businesses like Reddit and Snap are also seeing steep losses. (That’s not to mention how their tech hardware businesses will be adversely affected.)
What’s more, for many tech businesses, Chinese companies are responsible for a lot of the advertising, and that floor will likely cave under 54% tariffs. Tariffs that affect Chinese sales will hit advertising, too. Madison and Wall analyst Brian Wieser estimated that about $10 billion of Meta’s revenue for ads shown in the US come from outside the US, mainly China.
For Amazon, not only do many of the goods sold on its site originate in China, but those sellers spend a pretty penny advertising those goods on Amazon, as well.
“Amazon likely generates a bigger percentage of revenue from Chinese advertisers trying to reach American audiences: Marketplace Pulse estimates that Chinese manufacturers represent 50% of Amazon’s top sellers on its marketplace site in the US, and the marketplace is likely the primary driver of advertising activity for Amazon,” Wieser wrote. “The new policies could almost be described as a tax on advertising.”
Both Madison and Wall and MAGNA, an ad measurement firm, recently lowered their expectations for US ad spending this year.
Meta is trading down over 4% today, Reddit is down 11%, and Google and Amazon are down more than 2%.
