Kenya Faces 10% US Export Tariff from August 1 as Donald Trump Stands Firm
- US president Donald Trump invoked the International Emergency Economic Powers Act (IEEPA) to implement his new trade policy
- Kenya was one of the nations hit with the lowest tax rate as part of the protectionist tariff reforms under the Republicans
- Geopolitical economist Aly-Khan Satchu explained to TUKO.co.ke the implications of Trump's move on the African Growth and Opportunity Act (AGOA)
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Japhet Ruto is a journalist at TUKO.co.ke with over eight years of experience covering finance, business, and technology, offering in-depth analysis of economic trends in Kenya and globally.
Starting Friday, August 1, Kenya's exports to the US will be subject to a 10% tariff.
Source: Getty Images
The US president, Donald Trump, announced in a post on Truth Social that the enforcement deadline for reciprocal tariffs will not be extended.
"The August 1 deadline is the August 1 deadline; it will not be extended. A big day for America," the 47th US president posted on the social media app, which he owns through Trump Media & Technology Group (TMTG).
Why did Trump impose tariffs?
Trump used the International Emergency Economic Powers Act (IEEPA) to impose a baseline tariff of 10% on the tariffs of all US trading partners on April 2 in an attempt to address what he described as an "absence of reciprocity in our bilateral trade relationships.
Kenya was one of the nations hit with the lowest tax rate as part of the protectionist tariff reforms, which primarily targeted nations with significant surpluses in goods trade with the US, the largest economy in the world.
However, CBS News reported that Washington first suspended the tariffs' implementation for 90 days starting on April 10; this was extended to August 1 after it expired in July.
What does Trump's tariff mean for Kenya?
In an exclusive interview with TUKO.co.ke, geopolitical economist Aly-Khan Satchu stated that the African Growth and Opportunity Act (AGOA) will no longer be in force as a result of Trump's new policy.
He pointed out that stocks are sensitive and that the markets are undergoing large swings.
"It appears that AGOA has been terminated. Nobody knows where this will all end up because of the market's erratic, high beta, and ambiguous reaction thus far. Kenya is powerless against Trump administration and is probably making a lot of effort to lobby the wrong people," he explained.
What did Lee Kinyanjui say?
Lee Kinyanjui, the Cabinet Secretary (CS) for Investments, Trade, and Industry, stated that the government is awaiting a response from Washington about its request for a review.
According to the CS, Nairobi is eager to reach an agreement with Washington that would restore normalcy in exports to the US.
"We hope everything will return to normal, but the Americans will make the call. But since 10% is the lowest anyone has ever received, there is no reason to be alarmed," Kinyanjui told Business Daily.
Source: Facebook
What does Kenya export to the US?
Under the AGOA, Kenya majorly exports textiles and macadamia nuts to the US at zero duty and with no quantity restrictions.
The recipients of the tax and quota-free AGOA pact are concerned that it won't be renewed when it expires in September due to Trump's insistence on reciprocal tariff policies during trade negotiations.
Initiated during the Bill Clinton administration in 2000, the AGOA pact aimed to wean sub-Saharan Africa off of foreign aid and integrate it into international trade.
It was originally set to expire in 15 years, but in June 2015, it was extended for an additional 10 years.
Source: TUKO.co.ke
