Trump hits Kenya with 10% tariff but it could be a blessing in disguise

The United States has imposed a 10% reciprocal tariff on Kenyan exports effective April 9, 2025, as part of President Donald Trump’s broader trade policy overhaul targeting 185 countries. 

Tariffs are taxes or duties imposed by a government on imported or exported goods. 

They are used to regulate trade, protect domestic industries, generate revenue, and influence economic policies. 

This move is part of Trump’s “Liberation Day” initiative to enforce baseline tariffs on all U.S. imports, coupled with higher duties for specific nations. 

Key Kenyan exports to the U.S., such as textiles, tea, and coffee, which have previously benefited from duty-free access under the African Growth and Opportunity Act (AGOA), will now face a 10% tariff.

The 10% tariff raises costs for Kenyan exporters, potentially squeezing profit margins in the short term. 

In 2024, Kenya exported $737.3 million worth of goods to the U.S. while importing $782.5 million in U.S. goods. 

The tariff threatens Kenya’s trade balance, especially as the African Growth and Opportunity Act (AGOA), which granted Kenya tariff-free access since 2000, expires in September 2025

Other African nations face higher tariffs, including Lesotho (50%), Zimbabwe (18%), and Nigeria (14%), reflecting Trump’s strategy to pressure countries he claims impose “unfair” trade barriers. 

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How Kenya can manoeuvre the tariffs

While the tariff introduces a new layer of costs for Kenyan exports, it is significantly lower than those imposed on major textile-exporting nations like Vietnam (46%), China (34%), Bangladesh (37%), India (26%), Pakistan (29%), and Sri Lanka (44%). 

This disparity presents a strategic advantage for Kenya, particularly in the textile sector​.

To capitalise on this, the government is working on an export enhancement plan that encourages private investment in modern manufacturing facilities and workforce training. 

By expanding textile production beyond raw exports to finished products, Kenya could gain a larger market share in the U.S.​

Diversification Beyond Textiles

The tariff policy shift could also drive Kenya to diversify its exports. By focusing on value addition in key industries such as leather goods, coffee, tea, and agro-processed products, 

Kenya could maintain a competitive edge despite the 10% tariff.

For instance, instead of exporting raw coffee beans, Kenya could invest in roasting and packaging locally to fetch higher margins in international markets. 

Similarly, processed horticultural products and high-quality leather goods could find new opportunities in the U.S. despite the tariff​.

Challenges and the Road Ahead

Exporters will need to adjust to increased costs, which could squeeze profit margins in the short term. Additionally, scaling up production will require improvements in supply chains, including roads, ports, and energy infrastructure.

However, Kenya’s track record of economic adaptability offers hope. By prioritising investments in key sectors and streamlining logistics, the country can mitigate the tariff’s impact while strengthening its economy.

In the long run, the 10% tariff could catalyse Kenya to diversify its economy and reduce overreliance on preferential trade agreements. 

With competitors facing steeper trade barriers, Kenya has a rare chance to emerge as a stronger player in global markets.