NAIROBI, April 5 (NNN-KBC) — Kenya is anticipating increased costs of production in the textile and apparel sector in the wake of a 10pc tariff imposed on the country’s exports to the United States.
On Wednesday, President Donald Trump announced reciprocal tariffs to at least 60 countries exporting their products to the US including those from Kenya.
According to Investments, Trade and Industry Cabinet Secretary Lee Kinyanjui, the move by the US is likely to lead to higher costs for Kenyan manufacturers with expected rise in demand for cheaper Kenyan products compared to competing countries in the space which have significantly higher tariffs.
“While the 10pc tariff is lower than the competitors’ tariffs, it still raises costs for Kenyan businesses exporting to the US. Supply chain adjustments will be necessary such as expanding production to meet new demand. This will require investment in infrastructure, technology and skills development,” said Kinyanjui.
Following the tariff reciprocation, Kenya is now seeking to position itself as key textile and apparel manufacturing hub which could see the country become a primary source for American buyers after key textile and apparel export juggernauts in Asia received higher duties for their products.
Chinese imports to the US were slapped with a 34pc tariff, Vietnam 46pc, Bangladesh 37pc, Sri Lanka 44pc, Pakistan 29pc and India 26pc.
“With other textile-exporting countries facing much higher tariffs, Kenya could position itself as an alternative sourcing hub for US buyers. This represents an opportunity for investment in local textile production and value addition that could attract businesses seeking to avoid higher costs from traditional suppliers,” added Kinyanjui.
Kenya is also targeting to diversify its exports base by exploring opportunities to process and manufacture goods that are now more expensive from countries with higher tariffs.
“Industries such as apparel, leather and agro-processing could benefit from increased demand” added Kinyanjui.
Kinyanjui said his ministry is also engaging the Ministry of Foreign Affairs and other stakeholders in the industry to identify key products and encourage investment in targeted sectors in a bid to enhance Kenya’s exports to various markets.
The US has been a key export market for Kenya’s textile, apparel and leather under the African Growth Opportunity Act (AGOA) over the past 25 years. In January alone, exports to the US under the preferential trade deal amounted to Ksh 7.2 billion according to AGOA.Info. — NNN-KBC
