Temu, the Chinese e-commerce behemoth, has long dominated digital ad space, saturating platforms like Facebook and Instagram with high-frequency campaigns. However, recent political developments—particularly President Donald Trump’s push for heightened tariffs on Chinese imports—have triggered a noticeable slowdown in Temu’s U.S. ad activity.
Sensor Tower reports that Temu’s ad spending on Meta platforms dropped by 10% in Q1 2025 compared to the previous year, with its share of U.S. media budget shrinking. The drop in ad spend is mirrored by a sharp decline in app engagement and downloads, as Temu slips from first to 11th in the iPhone shopping app rankings.
Temu’s Broad Advertising Retreat Eases Competition, Reshaping Social Media Marketing Dynamics Significantly
Temu’s digital advertising contraction extends beyond Meta. Its presence on Google Shopping evaporated entirely between April 1–12, as shown by research from Smarter Ecommerce. Simultaneously, data from Tubular Labs confirms that Temu ceased all TikTok-sponsored content in the U.S. by early April. The uniform retreat across multiple platforms underscores a comprehensive scaling down of its U.S. marketing footprint—likely a response to economic uncertainty and rising costs from tariffs.
Temu Retreats From U.S. Ad Market as Tariff Tensions Shake Up Social Media StrategyTemu’s exit doesn’t just affect its own performance—it reverberates across the broader social media advertising market. Analysts like eMarketer’s Sky Canaves point out that Temu’s aggressive ad strategy forced rivals like Shein to boost their budgets just to compete. With Temu now out of the picture, competition for ad inventory eases. This change benefits other advertisers who no longer need to fight for attention against a massive spender, potentially allowing their campaigns to stretch further with less financial pressure.
Temu’s Exit Temporarily Lowers CPMs, But Tariff Pressure Limits Advertiser Confidence and Spend
Industry experts suggest that Temu’s withdrawal may also impact CPMs. With one of the biggest bidders exiting the space, average ad rates on platforms like Meta have already softened—down 6% in Q1 2025, according to Wpromote. While it’s difficult to attribute this entirely to Temu’s absence, the timing aligns. However, analysts warn this window of relief may be short-lived, as other brands will likely move in to take advantage of the lower costs and available inventory, driving prices back up.
Although Temu’s departure offers temporary breathing room, the broader context of U.S.–China trade tensions complicates the outlook. Tariffs are impacting not just Chinese firms but also domestic brands with China-based supply chains. As costs rise, marketers are rethinking their strategies—shifting focus to unaffected products and limiting ad spend.
Many remain hesitant to capitalize on the opportunity created by Temu’s retreat, given the volatile market conditions. As Amy Rumpler from Basis Technologies notes, brands are being cautious, and the relief offered by Temu’s absence does little to offset the wider pain of a tariff-driven economy.
