Kenyan goods entering the United States will attract a 10pc tariff following an executive order issued on Wednesday by President Donald Trump.
Kenya is among more than 60 countries President Trump has targeted in the new round of tariff measures which he says are meant to address US goods trade deficit which have grown by 40pc over the last five years to $1.2 trillion (Ksh 154.8T) last year.
“This trade deficit reflects asymmetries in trade relationships that have contributed to the atrophy of domestic production capacity, especially that of the U.S. manufacturing and defense-industrial base,” said President Trump.
Kenyan goods have been enjoying access to the American market at preferential terms under the American Growth Opportunity Act (AGOA) since 2000.
The trade deal which is set to expire in September 30, 2025 prompted Kenya to commence direct trade negotiations with US under the US-Kenya Strategic Trade and Investment Partnership which was initiated under former President Joe Biden
According to policy expert Leonard Khafafa, the new move by the Trump Administration overrides existing trade deal where at least 600 various products have been accessing the US market.
“This tariff supersedes AGOA that is if other negotiations are not held on the sidelines of whatever is happening at the moment,” said Khafafa during an interview with KBC Digital.
Data by the Kenya National Bureau of Statistics (KNBS) indicates that Kenya exported goods worth Ksh 64.3 billion to the US in 2023 accounting for 93pc of total exports to the Americas. On the other hand, imports from the US amounted to Ksh 112.8 billion.
Khafafa however expects minimal impact from the reciprocal tariff given that majority of Kenyan products are exported to other markets including Africa, Europe and the Middle East.
“The US is market to most of these economies but we would be affected in the sense that the manufacture of goods and services in those countries is going to increase commensurate to the hike in tariffs. So when we receive whatever we do get from them which is second hand most of the time for example motor vehicles, it will mean they will come at a premium than has traditionally been,” he stated.
In light of the latest trade move by President Trump, Khafafa says Kenya now needs to explore trade opportunities available under the African Continental Free Trade Area (AfCFTA).
“We can work with the rest of the continent so that we receive from the continent what we do not have and we give the continent what we it needs from us,” added Khafafa.
Khafafa says the best bet for Kenya now is also to take advantage of the higher tariffs imposed on other African countries to improve its manufacturing capabilities and expand export of finished products to the US market.
Within the East African Community, Democratic Republic of Congo has the highest tariffs imposed on its imports to the US at 22pc,Uganda 20pc while Rwanda, Tanzania, Burundi and South Sudan have 10pc reciprocal tariff.
Globally, Leshotho and Saint Pierre and Miquelon had the highest reciprocal tariff at 99pc.
