Since the return of President Donald Trump to the White House, businesspeople and policymakers worldwide have raised concerns over his barrage of tariffs, which have reignited vicious trade wars and affected the global economy. These changes are expected to have the most significant impact on countries in the Global South, including Kenya.
Amid the ongoing global tariff wars between the US and China, with Trump announcing reciprocal tariffs on several countries, including Washington’s traditional allies, Kenya, like other developing nations, will be forced to navigate a complex and unpredictable global trade environment due to reliance on exports.
While it might seem that tariff disputes between major economies—Washington and Beijing—would negatively affect their consumers through rising commodity prices, global trade is interconnected.
Even slight disruptions in the supply chain can have far-reaching consequences for many nations, including Kenya.
With an economy heavily tied to exports such as tea, coffee, horticultural products, and floriculture, Kenya is likely to feel the impact of rising tariffs on global trade.
The trade war could destabilise key markets and raise input costs. However, the current global situation also presents opportunities for Kenya to adapt, diversify trade relationships, focus on regional cooperation, and invest in industrialisation and technology.
Kenya’s export-driven economy is vulnerable to the volatility of global tariff shifts, particularly with China being a key trading partner. As one of the world’s largest economies and a dominant force in global manufacturing, China plays a critical role in shaping trade dynamics.
The trade war will also lead to disruptions, affecting Kenya, which relies on Chinese imports for raw materials and exports to China for agricultural products. For instance, Kenyan tea and coffee exports partly depend on the Chinese market.
With tariffs on Chinese goods and retaliatory tariffs from China on American products, global supply chains have been disrupted, and Kenya’s exports could face higher costs or reduced demand.
To mitigate these risks, Kenya must look beyond traditional markets and diversify its trade relationships. The country can benefit from deepening its economic engagement with China, especially in non-traditional export sectors. As a global manufacturing powerhouse, China is seeking new markets for its products and expanding its Belt and Road Initiative (BRI) across Africa.
Kenya, often referred to as the gateway to East Africa, can leverage this to strengthen trade ties with China through the Forum on China-Africa Cooperation. Through the BRI, Kenya can access Chinese infrastructure investments, boosting its domestic manufacturing capacity, logistics, and supply chain resilience.
While China remains an important trading partner, Kenya must reduce reliance on a few key global players and explore new markets. This is critical, not just because of the uncertainty created by tariff wars, but also because of shifting global trade dynamics that often disadvantage smaller economies.
The African Continental Free Trade Area (AfCFTA) offers a key opportunity for Kenya to boost its trade within the continent.
AfCFTA aims to create a single market for goods and services across 54 African countries, reducing reliance on global trade routes often affected by tariffs and trade disputes. By strengthening ties with other African nations, Kenya can open new markets and reduce exposure to external trade disruptions.
With Africa’s growing middle class and increasing demand for goods, Kenya can tap into these new markets to offset the effects of tariff wars between larger economies.
Additionally, Kenya can collaborate with China in renewable energy, technology, and industrialization—areas where China has significant expertise and investment. However, Kenya should not be entirely dependent on China. Its focus should be on how best to explore homegrown solutions to the complexities of global trade.
The ongoing tariff disputes between the U.S. and China also provide Kenya with a chance to explore alternative trade partnerships with countries that may be less affected by these global tensions.
By diversifying its trade portfolio, Kenya can ensure it is not overly exposed to the risks associated with tariff wars. Strengthening relationships with countries in Asia, the Middle East, and Latin America could offer Kenya a more stable trading environment. These regions are less caught up in the US-China trade war, offering Kenya a more stable alternative.
Simultaneously, Kenya must focus on enhancing its manufacturing capabilities. The tariff wars have exposed the vulnerabilities of global supply chains, and Kenya can seize this moment to build a stronger, more self-sufficient manufacturing sector.
By investing in local production and value addition, Kenya can reduce reliance on imports, mitigate the impact of tariffs on raw materials, and increase its ability to export finished goods. This will not only help Kenya weather global trade disruptions but also create jobs and stimulate economic growth.
Moreover, Kenya could position itself as a regional manufacturing hub for East Africa, capitalizing on growing demand for African products and China’s shift toward higher-value manufacturing. Implementing industrial parks would be a cornerstone in the country’s industrialisation journey.
Furthermore, Kenya should harness its growing information and communication technology (ICT) sector to navigate the impact of tariff wars. China has been a significant partner in Africa’s digital transformation, with investments in infrastructure, telecommunications, and e-commerce. Kenya’s success with mobile banking and innovations like M-Pesa provide a foundation for expanding digital trade.
By leveraging its tech capabilities, Kenya can bypass traditional barriers created by tariffs and enable businesses to engage in e-commerce and digital trade more effectively. With more than half of Kenya’s population connected to mobile phones and the internet, the country has the potential to tap into digital trade opportunities, especially in regions less affected by tariff disputes.
While the global tariff wars—especially between China and the U.S.—present significant challenges for Kenya, they also offer opportunities for strategic adaptation. By diversifying trade relationships, strengthening its manufacturing sector, and embracing digital trade, Kenya can reduce its vulnerability to external shocks.
Deepening economic cooperation with China, while exploring new markets and increasing regional trade through AfCFTA, will ensure Kenya remains resilient in the face of shifting global trade dynamics. Kenya’s ability to adapt, innovate, and pursue long-term economic growth that prioritizes regional integration and sustainable development will be key to overcoming these challenges.
The writer is a journalist and communication consultant
