Kenya and the US look set to sign a free-trade deal despite Trump’s attacks on global trade

Under President Trump, the US stance towards global trade has become increasingly protectionist, with billions of dollars of tariffs placed on goods from countries all over the world, engagement in a devastating trade war with China, and his policy of replacing the North America Free Trade Agreement (NAFTA) with Canada and Mexico.

Despite these attacks on global trade, Trump has made the unusual announcement that the US and Kenya are likely to sign a free-trade deal in the near future. This came following a meeting at the Whitehouse with Kenyan president Uhuru Kenyatta on Thursday.

With Kenya only just slipping into the top 100 American trade partners at a lowly 98th place, it is surprising that a free-trade deal is on the table with seemingly little economic benefit to be gained. The main American imports in Kenya are aircraft, machinery and agricultural goods, with coffee and nuts going in the other direction.

Given the limited economic impact of the free-trade deal, analysts predict that this move is geo-political in nature, rather than economic. For a long time, the US has been seeking ways to enhance their presence on the African continent, with their geo-political rival China totally dominating both economic and political ties in the last decade.

THINK LIKE AN ECONOMIST!

Q1. What is meant by the term protectionist?

Q2. Explain one way that President trump has promoted protectionism?

Q3. Assess the economic impact that a free-trade deal with Kenya is likely to have on American producers.

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TheCuriousEconomist

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