US tariffs: KNCCI to explore measures to cushion businesses

By Newsflash Reporter

Nairobi, Kenya – The Kenya National Chamber of Commerce and Industry (KNCCI) has raised concerns over the recent tariff adjustments by the United States, warning that the new policy poses significant challenges to Kenya’s export sector.

The US, being one of Kenya’s largest and most reliable trading partners, has introduced tariff changes that could exacerbate the country’s trade imbalance, which currently stands at Ksh 1.7 trillion, equivalent to 12% of Kenya’s Gross Domestic Product (GDP).

Impact on Kenya’s trade and economy

In response to the development, the Chamber has announced plans to convene an urgent meeting with key stakeholders, including exporters, investors, and policymakers, to discuss the emerging challenges and explore potential measures to cushion businesses from the impact of the tariff hike.

While Kenya is unlikely to impose reciprocal tariffs on US imports, the KNCCI is committed to finding viable solutions to mitigate the economic repercussions of the policy shift.

The Chamber President, Erick Rutto, emphasized that the US tariff changes should serve as a wake-up call for Kenya to reassess its economic structure, which has remained largely unchanged since the 1960s.

He noted that the move presents an opportunity for Kenya and Africa at large to focus on building resilient local brands, enhancing industrial capacity, and investing in key sectors such as Information Technology, digital technology, and industrial machinery.

“This development challenges us to strengthen our manufacturing sector and reduce reliance on exports that are susceptible to foreign policy shifts. It is an opportune moment for African nations to promote intra-African trade, encourage capital flows, and facilitate enterprise growth to sustain economic stability,” Dr Rutto stated in a statement on Thursday, 3 April, 2025.

Background on the tariff adjustments

The US tariff adjustments are part of broader trade policies introduced by the Trump Administration aimed at protecting American industries and reducing trade deficits.

The tariff hikes primarily target imports from various countries, including Kenya, affecting key export products such as textiles, agricultural produce, and industrial goods.

Kenya has historically enjoyed preferential trade terms with the US under agreements such as the African Growth and Opportunity Act (AGOA), which grants duty-free access to certain products. However, with the recent tariff increases, Kenyan exporters face higher costs, reducing their competitiveness in the U.S. market.

The situation raises concerns about the long-term sustainability of Kenya’s trade relations with the U.S. and the need for alternative markets and strategies to sustain export growth.

Explore alternative markets

The KNCCI, in collaboration with the Ministry of Trade, as well as the Ministry of Foreign and Diaspora Affairs, is set to explore alternative markets and products that could offset the impact of the U.S. tariff hike.

The Chamber will also assess opportunities for expanding Kenya’s export base to other international markets while advocating for policies that enhance the competitiveness of local businesses.

As part of its strategy, the KNCCI aims to provide policy support, lobby for a more favorable business environment, and advocate for reduced operational costs for exporters and investors navigating the new trade landscape. These efforts are expected to bolster Kenya’s economic resilience and ensure sustained growth despite external trade pressures.

Rutto reiterated the Chamber’s commitment to safeguarding the interests of Kenyan businesses, stressing that a proactive approach is necessary to mitigate risks and capitalize on emerging opportunities in the global trade environment.