Kenya believes new U.S. tariffs could offer a trade advantage over Asian textile competitors facing significantly higher duties.
Trade Minister Lee Kinyanjui highlighted the potential for Kenya to become a preferred sourcing hub for American buyers.
However, economists warn that a looming global recession, exacerbated by the tariffs, could negate any potential gains.
J.P. Morgan has increased the probability of a global recession by year-end to 60%. Furthermore, Kenya’s own high business costs,
including steep electricity prices and taxes, present a significant hurdle.
The chairman of a major Kenyan garment manufacturer questioned whether international brands would readily shift operations despite the tariff disparity.
The future of the African Growth and Opportunity Act (AGOA), which allows duty-free exports to the U.S., is also uncertain, potentially ending with the new tariffs.
While Kenya’s direct trade with the U.S. is smaller than with the EU and China, a slowdown in these major economies due to the tariffs could still have a substantial impact.
Despite the risks, some Kenyan manufacturers remain optimistic and plan to expand operations.
The ability of Kenya and its competitors to negotiate favorable terms with Washington will be crucial in determining the ultimate impact of the tariffs.
Vietnam has already initiated discussions with the U.S., but Kenya’s involvement in such negotiations remains unclear.
