*UPDATE (May 12, 2025): After weekend negotiations in Geneva, The U.S. and China agreed to cut tariffs on each other’s goods. The following are key takeaways from that negotiation:

  • Tariffs slashed: By May 14, the US will temporarily lower its overall tariffs on Chinese goods from 145% to 30%
  • Temporary deal: The new lower rates are set for 90 days while broader negotiations continue.
  • Fentanyl-related tariff remains: A 20% U.S. tariff tied to China’s role in the fentanyl trade is still in effect.
  • Further cuts unlikely: Treasury Secretary Scott Bessent noted it’s “implausible” for tariffs to fall below 10%.
  • Market reaction:
    • Nasdaq surged 4%
    • Dow Jones rebounded above pre-tariff levels
    • Shares of Amazon, Apple, and Tesla jumped
  • Ecommerce impact: Trade between the U.S. and China had nearly dried up in 2025—this shift offers potential relief, but uncertainty remains.

    Key tariffs remain in place, and long-term uncertainty still looms—making it critical for brands to stay agile and strategy-driven in how they respond.

Worried about rising costs from new tariffs? See how our AI helps you stay profitable

Let’s Talk

Introduction:

Many e‑commerce sellers facing new tariffs are tempted to slash marketing spend to protect margins. Indeed, industry data show major Chinese retailers like Temu and Shein cutting U.S. digital ad budgets (Facebook, Instagram, TikTok, Snap, etc.) by ~20–30% on average after tariff hikes​. But even well‑intentioned cuts can backfire badly. A sudden ad pull‑back risks losing hard-won visibility and growth momentum. E‑commerce algorithms reward fresh ad-driven sales and engagement, so dialing back ads often means lower organic rankings, lost shelf space, and higher costs just to re-enter the market later​. Below we break down the dangers — and how sellers can mitigate tariff pressures without disappearing from customers’ feeds.

TLDR: Slashing ad spend in response to new China tariffs might protect margins in the short term—but it comes at a high long-term cost. Sellers who pull back too aggressively risk losing rankings, visibility, and market share across Amazon, Walmart, and TikTok. Instead of going dark, shift your strategy: optimize for efficiency, reallocate spend, and maintain a presence where it matters most.

Why Sellers Cut Ads: The Tariff Squeeze

  • Cost Pressure: U.S. tariffs (up to 145% on Chinese imports at the time of writing this) have suddenly spiked costs for products sold by Amazon/Walmart/TikTok sellers​. With margins collapsing, sellers feel forced to protect profits by cutting expenses. Marketing spend is an obvious target.
  • Short-term Relief: Pulling ads does immediately cut spending and preserves cash. For example, data cited by Reuters found Temu’s U.S. daily ad spend fell ~31% and Shein’s by ~19% in early April 2025 amid tariff talk​. And TikTok ad prices have fallen sharply (CPMs down 30–80% year-over-year) as some advertisers bailed on the platform due to regulatory uncertainty​ — a trend linked to sellers rethinking spend.

The High Price of Lower Visibility

  • Lost Visibility & Organic Rankings: E‑commerce platforms (Amazon, Walmart, TikTok Shop) heavily reward sales velocity and engagement, many of which come from paid ads. On Amazon, for instance, sponsored ads not only drive immediate sales but also send signals to Amazon’s ranking algorithm (higher conversion rates, click-throughs, and sustained sales). When ads stop, sales often slip, which can cause a product’s organic search rank to tumble. In many cases, mastering Amazon PPC allow you to improve organic ranking. The two are directly correlated. In practice, sellers who pause ad campaigns frequently see their Best Seller Rank and search position decline within weeks, making recovery much harder. In some cases, sellers and advertisers that return after a bread often must bid higher to regain lost ground in rank.
  • Higher Re-Entry Costs: Once you’ve lost rank and market share, reviving a listing can be costly. Restoring algorithm momentum usually requires greater ad spend and more aggressive promotions than you had before. Put differently, each week off the air often means spending more to catch up later. Industry observers liken this to breaking a “halo effect” – for events like Prime Day, Amazon promises sellers huge audiences, but a seller skipping it (or pulling ads) misses out on that built-in traffic​. Rebuilding that reach later will be slower and pricier.
  • Competitive Displacement: When you pull ads, competitors gladly fill the void. On Amazon and Walmart, every click and impression you forego is an opportunity for another brand. Cutting back can mean losing top-of-search slots and buy box priority to rivals who keep advertising. Essentially, by retreating your ad presence, you cede shelf space — and loyal customers — to competitors who may maintain or increase their visibility.

Platform-Specific Risks

  • Amazon: With ~200M Prime members and huge seasonal events (Prime Day, Black Friday), Amazon rewards active promotion. Sellers pulling ads risk slipping out of key search results and into page 2 or beyond. The net result: cutting Amazon ads may protect immediate margins, but it burns much of your long-term market momentum.
  • Walmart: The Walmart marketplace is smaller than Amazon but growing fast (its ad business jumped 27% in FY24 to $4.4B​ according to marketingbrew.com). That means Walmart Connect is quickly becoming a crucial way to stand out. Walmart’s search algorithm also favors products with strong sales velocity and engagement. If sellers pause Walmart ads, they risk weaker placement and fewer eyeballs on their listings. Unlike Amazon, Walmart’s organic volume is still coming online, so now might seem safer to pause — but it’s actually when up-and-comers gain share. Failing to advertise on Walmart today means being further behind when platform reach grows (for instance, via Walmart’s new Vizio TV network​).
  • TikTok Shop: TikTok Shop is an emerging e‑commerce channel, and its algorithm heavily emphasizes fresh content and engagement. Many brands have found that running TikTok shopping ads or influencer partnerships is key to gaining organic traction. If sellers pull TikTok ads in reaction to tariffs (or fear of a U.S. ban), they’ll lose out on a platform where being “active” is critical. Data show TikTok Shop booming – $100M in Black Friday sales and triple the monthly buyers year-over-year (​reuters.com) – so it’s not one to abandon lightly.

In all cases, stepping off ads means the platform’s AI and competitor ads will push your products lower in relevance. The risk is that once you dial back your promotional “engine”, competitors’ engines will continue revving.

Key Cons of Slashing Ads

  • Declining Organic Traffic: Lower search rank and fewer impressions mean fewer organic clicks and sales. Over time this can damage the core growth of a listing.
  • Loss of ‘Halo’ or Event Boosts: Missing big sales events (Prime Day, Cyber Monday, holiday ads) yields a halo effect loss – those huge bursts of shoppers disappear.
  • Algorithmic Setbacks: Modern platforms rely on continuous signals. Stopping ads sends a “cool off” signal, potentially slowing down how often your products are shown.
  • Competitive Displacement: Gaining back top positions after absence is very expensive; meanwhile, rivals consolidate share.
  • Limited Time Advantage: Any cost savings are temporary – once competitors catch up, the old status quo of higher ad costs returns.

Best Practices: Navigating Tariffs Without Going Dark

Rather than a blanket ad blackout, sellers can mitigate costs more strategically:

  • Optimize for Efficiency: Tighten your targeting, pause underperforming ads, and negotiate better rates. Consider shifting spend to high-ROI keywords or platforms (e.g. Walmart ads may be cheaper than Amazon’s per-click rates). This keeps you visible without gutting your whole budget.
  • Lean into Analytics: Use data to cut waste – e.g. if certain products have negative margin under tariffs, pause those ads only. Shift budget to your core, higher-margin SKUs. Monitoring ACoS ensures every ad dollar earns enough sales.
  • Experiment with Channels: If Amazon seems pricey, test Walmart or TikTok where CPMs may be lower. Walmart Connect is growing 24–27% annually​, offering new inventory for your ads. Diversification spreads risk and may find cheaper ad space.
  • Bundle & Value-add: Instead of blanket price hikes, consider adding bundling or loyalty incentives. Consumers hate price jumps, so maintaining perceived value can sustain conversion rates even with slightly higher prices.
  • Content & Organic Marketing: Boost organic presence with SEO and social content. For Amazon, focus on conversion-rate factors (e.g. better images, A+ content) to offset some lost ad clicks. On TikTok, post engaging organic videos to ride the algorithm and reduce dependency on paid reach.
  • Plan Paid Relaunches: If you do cut back, have a plan to reinvest aggressively later. For example, allocate budget to pre-holiday seasons when ads pay off most. Don’t abandon ads entirely – even a small “always-on” campaign maintains rank.

In short, treat advertising as an investment, not an expense to eliminate. In fact, studies show companies that maintain or increase marketing during downturns rebound faster and capture share. The same applies to e-commerce ads under tariff stress: cutting back can dull your blade at the exact moment you need it sharpest. By intelligently reallocating ad dollars and cutting waste (rather than blanket pauses), sellers can absorb higher costs without fading into the background.

Next Step: How to Adapt Your Strategy with Teikametrics

While pulling back on ad spend may seem like the quickest way to protect margins under tariff pressure, it often leads to lost visibility, lower rankings, and higher costs down the line. The better path? Staying active — and getting smarter.

If you’re wondering how to adjust your ecommerce strategy without cutting performance, we’ve broken it down for you: from expanding into new marketplaces like Walmart and TikTok, to automating bid management, optimizing inventory, and tracking real-time profitability — Teikametrics provides the tools to help sellers adapt quickly and profitably to changing cost pressures.

👉 Explore 8 Smart Ways to Use Teikametrics to Respond to Tariffs

Key Takeaway: Major tariffs are a harsh blow to margins, but radically pulling the plug on ads comes with steep opportunity costs. Sellers on Amazon, Walmart, and TikTok should trim smart, not vanish. Keep at least some ad presence to stay in front of buyers; pivot budgets to high-impact channels; and focus on efficiency. This balanced approach will help weather tariffs while preserving the growth engine of visibility and ranking that makes e-commerce sales possible.

Worried about rising costs from new tariffs? See how our AI helps you stay profitable

Let’s Talk

Sources: Industry analytics and news reports and platform data​: Reuters, McKinsey, Digiday, Carbon6, MarketingBrew, TheGuardian