As the 2025 tariff wars heat up, sparked by shifts in U.S. trade policy, small and medium-sized enterprises (SMEs) in Kenya and across Africa are feeling the impact. A new 10% tariff on Kenyan exports to the U.S., along with even steeper tariffs on other African nations, is pushing up costs and disrupting trade routes. At the same time, retaliatory tariffs from countries like China are adding more pressure. With the African Growth and Opportunity Act (AGOA) set to expire in September 2025, uncertainty hangs heavy over the continent’s trade future.
Here’s what these changes mean for SMEs—and how businesses can adapt.
What’s at Stake?
Kenya exported about $737 million worth of goods to the U.S. in 2024, with key products like apparel, tea, and coffee leading the pack. With tariffs now in place, prices may go up—making it harder to stay competitive in the American market.
Beyond that:
- Import costs for machinery and tech are rising due to tariffs on Chinese goods.
- A potential global recession may slow demand from European buyers.
- But there’s a silver lining: Kenya’s tariffs remain lower than those of countries like Vietnam (46%), making it an attractive option for U.S. buyers seeking alternatives.
Five Moves to Stay Resilient
| Look Beyond the U.S and China | The African Continental Free Trade Area (AfCFTA) opens doors to a $60 billion intra-African market. SMEs can reduce reliance on single markets and find new demand closer to home. | Try This: Check out regional trade fairs, explore platforms like Afrikrea, or reach out to the Kenya Export Promotion and Branding Agency for market info. |
| Rethink Supply Chains | Rising costs from Asia mean it’s time to explore local or regional suppliers. | Try This: Use platforms like TradeHub Africa or work with local chambers of commerce to connect with nearby manufacturers. |
| Tap into Government Support | The Kenyan government, through the Bottom-Up Economic Transformation Agenda (BETA), is offering support to key sectors. | Try This: Visit the Kenya Investment Authority or your county office for info on grants, tax relief, or export incentives. |
| Cut Technology Costs | With tech tools getting pricier, SMEs need to do more with less. | Try This: Switch to affordable cloud services like Zoho or Microsoft Azure. Take advantage of free training tools for staff on cybersecurity and energy efficiency. |
| Seek New Funding Sources | Investors are turning their eyes to African innovation, especially in agriculture, green energy, and fintech | Try This: If your business supports climate resilience or job creation, pitch to funds like the Kenya Climate Innovation Center or explore AfDB and Afreximbank options. |
Stay Informed, Stay Ahead
- Join Networks: The United SMEs Association of Kenya offers training and updates. ASNET helps link SMEs to trade policy.
- Show Up: Attend events like the Africa CEO Forum (May 2025, Kigali) or the Connected Africa Summit in Nairobi.
- Track News: Follow sites like the U.S. International Trade Commission, BBC Africa, and the Kenya Association of Manufacturers for timely updates.
- Keep Talking: Make tariff risks part of your team’s regular check-ins and planning meetings.
Yes, the tariff wars and AGOA expiry bring real challenges—but they also open the door to rethink trade strategies, connect more with African markets, and find new partners. Kenyan SMEs that move quickly, stay informed, and diversify both markets and supply chains will be in a much better position to weather the storm—and maybe even grow through it.
Article by Michael Nyairo
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