Kenya’s trade relationship with the United States has taken a significant hit after President Donald Trump signed an executive order imposing a 10% tariff on Kenyan exports. This new tariff, which affects textiles, tea, coffee, and pharmaceutical products, could have far-reaching consequences for Kenyan businesses relying on the American market.
Impact on Kenya’s Trade with the US
The newly imposed tariff will affect Kenyan exports worth Ksh109.7 billion ($784 million), particularly in key industries such as:
✅ Textiles – Previously duty-free under AGOA, now facing higher costs in the US market.
✅ Tea & Coffee – Kenya’s largest agricultural exports may become less competitive.
✅ Pharmaceuticals – Including vaccines, blood products, and medical cultures, valued at Ksh22 billion ($157 million).
This move is expected to reduce exports, cause job losses, and lower revenue for businesses that depend on the US market.
Why Trump Imposed the Tariff
Announcing the executive order, President Trump defended the reciprocal tariffs as a way to protect American trade interests, particularly in response to countries that impose Value Added Tax (VAT) on US exports.
“Today we are standing up for the American worker and finally putting America first,” Trump stated, calling it “one of the most important days in American history.”
Trump argued that when US goods enter VAT-imposing countries like Kenya, they become more expensive, making them less competitive. Meanwhile, Kenyan exports to the US enjoy zero-rated VAT, giving Kenyan businesses an unfair advantage under AGOA.
Kenya-US Trade at a Glance
📉 Kenyan exports to the US: $784 million (Ksh109.7 billion)
📈 US exports to Kenya: $807.35 million (Ksh113.03 billion)
🔺 Kenya imposes a 16% VAT on US imports, making them costlier.
🆓 Kenyan exports have been duty-free under AGOA—until now.
Regional Impact: Tanzania & Uganda Also Affected
Kenya is not alone. Neighboring countries Tanzania and Uganda have also been slapped with the 10% reciprocal tariff, signaling a broader shift in US trade policy towards East Africa.
What’s Next for Kenya’s Trade Relations?
With AGOA set to expire soon, Kenya must navigate these new trade barriers carefully. Experts suggest that:
✔️ Negotiating a new trade deal with the US will be crucial.
✔️ Diversifying export markets to reduce reliance on the US.
✔️ Strengthening regional trade partnerships to counteract losses.
As tensions rise, the fate of Kenya-US trade relations hangs in the balance.
