Meta -Aktie: Trump’s Customs Plan hits Temu. Why it matters to Facebook.

On By Littum

President Donald Trump’s plan to wander tariffs and suspend the exemption for ‘De Minimis’ on import fees could get some advertisers, especially Chinese e-commerce companies, to withdraw on spending, analysts said Monday. But Facebook parent Meta platforms (Meta) Stock, despite the potential hit, stood for a fast -growing segment of its digital advertising sales.

Trump signed an executive order on Saturday that introduced 25% duty on products from Canada and Mexico while raising customs duties on Chinese goods by 10%. The tariffs must be adopted on Tuesday. The order also reports reportedly the minimis exemptions in the US trade policy that allow packages valued at $ 800 or less to enter the US duty free. (Mexican President Claudia Sheinbaum said on Monday that Trump agreed to delay customs duty in Mexico for a month, following a telephone conversation in which both leaders agreed to take joint measures to fight fentanyl trading).




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The Minimis shipments have grown significantly with the popularity of discount online shopping platforms Temu and Shein, which sends products directly to US consumers from merchants in China.

An important part of Temus Growth as well as Sheins has advertised on Facebook and Instagram and through Google.

“A suspension of the minimis exemption poses a risk of AD consumption from Chinese e-commerce platforms such as TEMU and Shein,” Bofa Securities Analyst Justin Post told clients on Monday. “With the exception removed, their growth could be significantly limited, which could potentially lead to cuts (i) marketing budgets.”

What are the minimis exemption?

According to the so-called, the minimis exemption allows the US trade law allow packages to be valued at $ 800 or less to enter the US without paying duty rates. The more than 90-year-old provision is under greater control over the last two years, as Chinese e-commerce companies have contributed to rapid growth for imports.

There was 1 billion de minimis shipments in the third quarter of 2024 according to US Customs and Border Protection DataCompared to 640 million in total by 2020.

Former President Joe Biden suggested last year limits to what products could qualify for the exemption, although the rule had not yet taken effect.

Temus estimated value to meta

BOFA’s Post estimated that TEMU and Shein represent between 2% and 4% of the total advertising costs for Google and Meta.

Advertisers from China use on Facebook and Instagram to reach consumers in another market is a fast growing business for Meta. Meta’s apps are banned in China itself. The tech giant recently revealed that Chinese advertisers represented 11% of ad revenue for its so-called family of apps, compared to 6% in 2023.

Youssef Squali, an analyst at Truist, said Monday that removal of the minimis exemption is a “negative for ad platforms.” It can also open an opportunity for other e-commerce platforms to advertise more.

Said Squali Etsy (Etsy) could, for example, take advantage of “less competition for advertising space.”

It is especially true in searching advertising and social media, he added, “where Temu and Shein drove prices higher and ROAS (Return-On advertising tips) down for peers in general and etsy especially in the last 12-18 months.”

Etsy-CEO Josh Silverman said late in 2023 that Temu and Shein “almost” increased the cost of advertising on their own.

There is also a broader risk of digital advertising from customs outside China e-commerce, BOFA’s post added.

“For the US online media sector, whose manufacturers and sellers reduce ad consumption to offset concerns about rising product costs, there may be a negative impact on the sector’s sales,” Post said.

With reference to data from Emarketer, Post said that retail, car and electronics categories represent 43% of online advertising expenses from 2024.

Meta -stock near new heights after Q4 earnings

In the stock market today, the Meta share opened lower before he recovered. The stock rose 1.2% to close at 697.46. Meta shares are closed higher in 11 consecutive trading days.

On the other hand shares of Temu parent PDD HOLDINGS (PDD) lost 6% to close at 105.24. Amazon (Amzn) Stock, launching a discount-focused Temu competitor called Haul last year, closed a fraction lower. Shares of Google Parent Alphabet (Googl) lost 1.4% to close by 201.23.

Meta stock is hovering near record highs. Last week, the social media company Q4 results showed a 50% increase in earnings to $ 8.02 per year. Share, while revenue rose 21% to $ 48.4 billion.

Meta has received approx. 17% so far this year after collecting 70% by 2024.

Meta is also one IBD Leaderboard stock.

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