The Kenya Association of Manufacturers (KAM) has raised concerns over the recent 10% tariff imposed by the United States on Kenyan exports, warning of potential disruptions to the country’s trade balance and economic growth.

According to the United States International Trade Commission (USITC), Kenya’s exports to the U.S. in 2024 amounted to $737.3 million (Ksh 98.5 billion), with apparel accounting for 72% ($533 million or Ksh 71.2 billion) of that total.

Meanwhile, imports from the U.S. stood at $782.5 million (Ksh 104.5 billion), leading to a trade deficit of $45.2 million (Ksh 6 billion) for Kenya.

The new tariff adjustment could make Kenyan exports, particularly apparel, less competitive in the U.S. market. Previously, these exports benefited from duty-free access under the African Growth and Opportunity Act (AGOA), a program that has created over 58,000 direct jobs and 100,000 indirect jobs in Kenya’s apparel sector.

KAM has outlined the likely impacts of the tariff hike. The first major concern is a reduction in price competitiveness, as Kenyan goods that were previously exempt from tariffs will now face additional costs, making them less attractive to U.S. buyers.

The second key issue is the impact on existing contracts, as export agreements based on the 0% AGOA preferential treatment may be disrupted, potentially forcing manufacturers to absorb extra costs.

To mitigate these risks, KAM is advocating for continuous bilateral trade engagement between Kenya and the U.S. The association is calling for an extension of AGOA beyond its current expiry in September 2025, ensuring continued trade benefits for Kenya, Africa, and the U.S. through job creation, industrial growth, and investment opportunities.

Additionally, KAM is pushing for a review of the 10% tariff to maintain Kenya’s export price competitiveness in the U.S. market. Furthermore, the association urges the inclusion of a transition clause to accommodate goods already en route to the U.S. under the 0% AGOA preference.

KAM remains committed to working with the Kenyan government and key stakeholders to safeguard trade interests and ensure Kenya remains a strong global competitor. As discussions continue, both nations will need to navigate the complexities of trade policy to maintain the benefits of their long-standing economic relationship.

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