U.S. President Donald Trump has issued a warning about the possibility of imposing fresh tariffs on countries that levy a Value Added Tax (VAT), including Kenya. This move could significantly impact countries like Kenya, which rely on trade relationships with the United States. Trump’s stance on tariffs was part of his broader “America First” economic policy, which sought to protect U.S. industries and reduce trade imbalances.
VAT is a tax levied on goods and services at each stage of production or distribution. While VAT is a common tax system in many countries, including European nations and parts of Africa, it has been a point of contention in trade negotiations, particularly with countries like the U.S., which does not impose a nationwide VAT but relies on sales taxes. Trump’s said that countries charging VAT on exports could create a trade disadvantage for the U.S. by making American goods less competitive in the global market.
For Kenya, which exports agricultural products, textiles, and other goods to the U.S., tariffs on products taxed under VAT could raise the cost of Kenyan exports. This would make Kenyan goods less attractive to U.S. consumers, potentially hurting the country’s economy. The impact could be particularly damaging for Kenya’s small-scale farmers and industries, which depend on international trade for revenue.
While it’s unclear whether such tariffs would actually be implemented, the mere threat could disrupt Kenya’s trade and create uncertainty in its economic standing. This situation underscores the delicate balance countries must maintain in international trade agreements, especially with major economic players like the U.S.
