Global economy has turned out to be uncertain as United States (US) President Donald Trump warns that lifting the reciprocal tariffs he previously imposed could cost the country more than $3 trillion in losses.
“The US Supreme Court was given the wrong numbers. The ‘unwind’ in the event of a negative decision on tariffs, would be, including investments made, to be made, and return of funds, in excess of 3 trillion dollars. It would not be possible to ever make up for that kind of a ‘drubbing’. That would truly become an insurmountable national security event, and devastating to the future of our country,” Trump wrote on his Truth Social page.
Kenya still depends on US economic fundamentals – the country is a major source of remittances ($2.78 billion in 2024, more than half of Kenya’s total), it is a vital export destination for jobs in the textile industry, and a cornerstone of the tourism sector.
Speaking at a recent NCBA bank’s forecast (seminar) on the state of macros in 2025/26, economist and president William Ruto’s advisor Dr David Ndii observed that Trump’s reciprocal tariffs might be complex, but all is not lost, as alternatives are many and diverse.
“We have exposure to Trump tariffs, but mostly on apparels. We are working on how to diversify… we can sell to Europe. Another place where we see opportunities is Africa. We can sell our apparels directly to Africans and cut the middlemen,” Ndii explained.
Following the first hearing of the tariff case at the US Supreme Court on November 5, The Washington Post reported that some justices expressed doubts about the tariffs’ legality. The case was launched after a group of business representatives filed a lawsuit against the US government, claiming the tariffs were illegal, harming their companies.
On August 29, the District of Columbia Circuit Court of Appeals ruled that Trump lacked the authority to impose many of the tariffs he announced. On September 4, the Trump administration asked the Supreme Court to overturn the ruling.
On April 2, Trump confirmed the introduction of tariffs on products from 185 countries and territories. The American leader later adjusted the tariff rates for a number of countries.
Kenya Kwanza administration has been pushing for a free trade deal with the US, especially since the African Grown and Opportunity Act (AGOA) expired in September, leaving Kenya’s important textile exports to the US subject to 10 percent tariffs. The negotiations have, seemingly, hit a dead end, and it will take time to reduce pressure that the Trump decision might breathe into the Kenyan economy.
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