Trump Imposes New Trade Tariffs on Kenya, Impacting Key Exports

Kenya’s trade with the United States suffered a major setback on Wednesday after former US President Donald Trump signed an executive order imposing new tariffs on Kenyan exports.

The new directive introduces a 10 percent baseline tariff on all Kenyan goods entering the US, affecting trade worth approximately Ksh109.7 billion (784 million USD).

This move is expected to hit Kenya’s key export industries, including textiles, tea, and coffee, which previously enjoyed tariff-free access under the African Growth and Opportunity Act (AGOA).

The tariff increase could lead to a decline in Kenya’s exports, potential job losses, and reduced revenue for businesses that rely on the American market.

Trump justified the decision, stating that the new tariffs were necessary to safeguard American trade interests and ensure fair competition.

Additionally, Kenya’s pharmaceutical exports to the US, including vaccines, blood, antisera, toxins, and cultures, will also be subjected to these tariffs.

The pharmaceutical sector alone accounts for around Ksh22 billion (157 million USD) of Kenya’s exports to the US, making it another significant area likely to be affected.

Tariffs Linked to VAT Policies

This new order comes less than two months after Trump instructed his administration to introduce tariffs on countries that impose Value Added Tax (VAT) on American products.

Trump made the announcement through a post on X (formerly Twitter), directing key officials such as the Secretary of State, the Secretary of Commerce, the Secretary of the Treasury, and the United States Trade Representative (USTR) to find ways of implementing the tariffs.

According to Trump, VAT systems used by several countries, including Kenya, place American exports at a disadvantage by making them more expensive compared to local goods.

He argued that while Kenyan exports to the US enjoy zero-rated VAT, American products face a 16 percent VAT charge in Kenya, making them costlier for local consumers.

“Today we are standing up for the American worker and we are finally putting America first,” Trump declared, calling the new order “one of the most significant decisions in American history.”

He insisted that US exporters have long faced unfair competition, while countries like Kenya benefited from duty-free trade agreements such as AGOA.

Impact on Regional Trade

Kenya is not the only country affected by these new tariffs. Neighboring nations such as Tanzania and Uganda have also been subjected to the same 10 percent reciprocal tariff.

Kenya imports goods worth approximately Ksh113.03 billion (807.35 million USD) from the US, including mineral fuels, machinery, aircraft and spacecraft parts, cereals, and other essential commodities.

With the new tariffs in place, trade relations between Kenya and the US are expected to shift, possibly forcing Kenya to seek alternative markets or trade policies to cushion its economy from the impact.

The move is likely to raise concerns among Kenyan businesses and policymakers, as they assess the long-term implications of the new tariffs on trade, employment, and overall economic growth.

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