China has cautioned Kenya and other countries against taking sides in the ongoing trade dispute with the United States, stating that doing so could have serious diplomatic and economic implications.
The Chinese Commerce Ministry on Monday issued a statement after it emerged that Donald Trump's administration plans to pressure countries into restricting trade with China.
In their statement, the Chinese Commerce Ministry said, “Seeking temporary self-interest at the expense of others — in exchange for so-called exemptions — is like asking a tiger for its skin. In the end, it will achieve nothing and harm both others and oneself.”
The strongly worded statement ended with a warning, stating, “China firmly opposes any party reaching a deal at the expense of China’s interests. If such a situation arises, China will not accept it and will resolutely take reciprocal countermeasures.”
The warning puts Kenya on an economic tightrope, as the country now has to tread lightly or risk losing one of its biggest trading partners over the past two decades, China. Already, President William Ruto is on his way to Beijing for a state visit that comes as China seeks to solidify its influence in Africa as a way to find alternative markets for its products.
This will not be easy either, as Kenya will also have to somehow appease the US, which recently paused its “reciprocal” tariffs on most nations for 90 days to concentrate on the economic wrestle with China. Meanwhile, China saw the pause as a tactic by the US to swing their favour.
Since the escalation of the trade wars, levies on Chinese imports have been hiked to an alarming 145 per cent. To counter this, China hiked tariffs on US goods to 125 per cent.
The bigger picture: Despite Kenya being partners with both China and the US, the Chinese warning should not be taken lightly, especially because relations with the Asian superpower go beyond just trading.
After solidifying its position as Kenya's largest source of imports, China has also invested in Kenya's key infrastructure projects, like the Standard Gauge Railway
Kenya has also benefited from China setting up investments locally – a dynamic which has boosted employment opportunities. If Kenya somehow rattles China through closer relations with the US, China may well limit their influence on the Kenyan market.
With the US actively pushing its partners to limit their exposure to China, including not serving as trade routes for Chinese goods or allowing Chinese companies to operate on their soil, Kenya is now at risk of becoming an economic casualty of the ongoing trade wars.
If the Kenyan government succumbs to China's economic coercion, the move could have a flipside, as it could mean the country could fall victim to sub-standard Chinese goods that are now shut out of the US markets.
