Kenyan CEOs have expressed jitters over the recent tariff and policy changes implemented by US President Donald Trump, with concerns ranging from higher import costs for inputs and finished goods, as well as lower earnings from exports.
In a survey that sought to establish the expectations of business activity for the third quarter of 2025 and which targeted CEOs of over 1,000 private sector firms, the Central Bank of Kenya (CBK) also reported the business leaders’ concerns over the impending lapse of the African Growth and Opportunity Act (Agoa) agreement in just over three months.
Agoa provides duty-free access to the US market for a list of exports such as textiles from eligible countries in sub-Saharan Africa, Kenya included.
“Firms expect to be impacted through higher cost of imports for inputs and finished goods, lower earnings from exports –particularly to the US once the Agoa Agreement lapses–, increased cost of production due to inflationary pressures emanating from higher costs of goods, and lower consumer demand due to reduced disposable income,” wrote CBK in the report.
According to the CEOs, further impact is set to emanate from second round effects on local businesses relying on clients that have been affected by the Trump-imposed tariffs and policy changes.
Mr Trump, on April 2 this year, invoked the International Emergency Economic Powers Act to impose a 10 percent baseline tariff on all US trading partners in a bid to address “the absence of reciprocity in our bilateral trade relationships”.
The US, however, paused enforcement of tariffs above 10 percent for 90 days from April 10 to allow room for further negotiations, but excluded China from imposing immediate retaliatory taxes.
Last month, Kenya made a direct formal appeal to Washington to reverse the 10 percent tariff on exports in a bid to preserve duty-free exports for tens of products from the country and protect more than 65,000 jobs.
Trade Cabinet Secretary Lee Kinyanjui told NTV on May 8 that Kenya had received a positive initial response from the US following the appeal.
“We have appealed against that 10 percent (tariff) because we are not at the same level as many developed nations. Conversations are ongoing,” he said at the time.
Kenya’s exports, mainly textiles and macadamia nuts, have since 2000 accessed the American markets tax and quota-free under the Agoa deal, which is set to expire in September this year.
Nairobi exported Sh88.8 billion worth of goods to Washington last year, compared to Sh156.9 billion worth of shipments to the European Union (EU).
Separately, the Trump-led administration has drafted a bill that seeks to impose a five percent excise tax on remittance outflows by immigrant workers, in a legislative proposal that could deal a blow to the hundreds of billions of shillings that Kenyans living and working in the US send back home annually.
Diaspora remittances from the world’s largest economy totaled $2.63 billion (about Sh339.17 billion) last year, according to CBK data.
