K'ONYANGO: Kenya's Trade Future in Uncertain Waters as America Prioritizes Itself

The globe is experiencing a major transformation as a new international system arises following Donald Trump's return to the presidency at the White House.

This return has brought back unilateralism and protectionism, signaling a shift away from the international trend towards multilateralism that was gaining strength.

Rather than promoting worldwide agreement, we've witnessed the return of tariffs, quotas, and aggressive bargaining methods, leading to significant ambiguity in international commerce.

The return of these protectionist measures during Trump's presidency is expected to significantly affect Kenya, notably in its discussions about trading with the United States.

It is uncertain whether Trump's administration will proceed with Joe Biden’s Strategic Trade Investment Partnership (STIP) or reinstate the Free Trade Agreement (FTA), which remained unfinalized during Trump’s first term.

Following Trump’s “America First” agenda, should the United States opt for trade talks with Kenya, it is quite probable that STIP might take a back seat as they may seek to reinstate the FTA instead. Nonetheless, such a move could bring about considerable alterations, thus Kenya needs to ready itself to tackle possible hurdles so as not to find itself unprepared.

A key aspect that could be tackled during these discussions is Kenya's taxation framework.

The Kenyan government plans to introduce a minimum tax on international corporations doing business within its borders.

If this is perceived as discriminatory, reciprocal tariffs could be introduced, as Trump has instructed key U.S. officials to investigate whether foreign countries impose extraterritorial or discriminatory taxes on U.S. citizens and corporations.

Kenya has long sought a trade agreement with the U.S., but this has been complicated by the change in leadership.

Upon taking office, President Biden’s team discontinued the policies implemented under the Trump administration, which left Kenya unsure about what the future held for trade between the two countries.

Given the implementation of the "America First" policy, Kenya needs to ready itself for the likelihood that should trade negotiations restart, it might face an increased pressure to concede terms which could prove unfavorable.

The United States could ask Kenya to modify its policies in an effort to finalize a trade deal, and Kenya needs to prepare for this possibility.

The trade talks between Kenya and the U.S. during Trump’s presidency will reflect his key concerns. Should Kenya fail to appear significant from America's perspective, negotiations might not occur at all, possibly only resuming once this presidential tenure concludes.

Should negotiations recommence, they would probably follow a distinct course compared to those conducted during the Biden administration, which emphasized multilateral approaches and international structures such as the World Trade Organization (WTO) and the African Continental Free Trade Area (AfCFTA).

On the contrary, Trump prioritizes bilateral deals, emphasizing “America First.” Therefore, Kenya might face pressure to offer more advantageous conditions for U.S. companies, suggesting that a more balanced trade agreement could be forthcoming.

Kenya continues to hold significant importance in global politics, and should Trump opt for a trade deal with Nairobi, this move would probably stem from his aim to offset China’s growing presence in both Kenya and the broader area.

This might result in the U.S. providing Kenya more advantageous trade conditions in return for reducing dependence on Chinese investments and infrastructure projects, particularly those under China’s Belt and Road Initiative (BRI). Nonetheless, should Trump consider Africa unimportant, Kenya may fail to gain from this potential trade deal.

A significant factor is that Africa has mostly been overlooked in Trump’s foreign policy strategy. The end of the African Growth and Opportunity Act (AGOA) in September adds another layer of complexity to this issue.

African countries must now start plotting their independent courses because Trump’s "America First" agenda has put pressure on traditional global partnerships, making Africa susceptible to a more business-like stance from the United States.

This pattern of decreased assistance from Western entities can be seen in choices made by countries such as the United Kingdom, Germany, and various others across Europe.

On the contrary, China's collaboration with Africa, supported by platforms such as the Forum on China-Africa Cooperation (FOCAC), keeps providing substantial investment in infrastructure and industrialization.

In contrast to Biden’s emphasis on lowering non-tariff barriers, enhancing regulatory collaboration, and promoting inclusive and sustainable trade deals, Kenya needs to brace itself for a tougher stance from Trump’s administration.

Negotiations with the United States may result in increased duties and more stringent regulations designed to safeguard American industries and enterprises. Trump could potentially urge Kenya to decrease its dependence on Chinese funding as part of securing a trade deal.

Given that the U.S. has exited the Paris Climate Agreement, it is probable that questions of sustainability will receive reduced attention during upcoming trade talks between Washington and Nairobi.

Human rights issues might be sidelined as Trump's focus is expected to align with economic benefits for the U.S.

Amidst the worldwide unpredictability stemming from shifts in policies at the White House, it has become essential for Kenya to pursue collaborations aimed at fostering financial self-sufficiency, decreasing dependence on conventional funders, and securing enduring development.

Kenya ought to concentrate on forging international connections that provide pragmatic and advantageous outcomes for both parties moving forward.