AGOA First: Kenya Puts China Trade Deal on Ice

Kenya Freezes China Trade Deal as It Races to Regain AGOA Access
Expanded version
Kenya has delayed formalizing a sweeping trade agreement with China, with the deal currently stalled at the cabinet, parliamentary, and presidential approval stages. Reports indicate that pressure from the United States has contributed to this pause, as Washington warns that a deepened trade pact with Beijing could complicate Kenya’s prospects under U.S.-backed trade initiatives.[whalesbook +3]At the same time, Nairobi is prioritizing the renewal of its eligibility for the Africa Growth and Opportunity Act (AGOA), a cornerstone U.S. trade program that grants duty-free access for thousands of products from eligible sub-Saharan African countries. AGOA’s expiry has sharply increased tariffs on key Kenyan exports to the U.S., forcing policymakers to focus on restoring preferential access to safeguard jobs and foreign exchange earnings.
The lapse of AGOA benefits has hit Kenya’s textile and apparel sector especially hard, exposing exporters to tariffs that can exceed 20 percent and undermining the competitiveness of firms based in export processing zones. Agricultural producers shipping tea, coffee, and other farm products have also faced new cost pressures, threatening incomes for farmers and workers across the value chain.
Kenya’s leaders now face a delicate balancing act between preserving long-standing security and trade ties with the United States and expanding economic cooperation with China, which has become a major creditor and infrastructure partner. The outcome of this strategic choice will shape the trajectory of Kenya’s industrialization, export diversification, and role within an increasingly polarized global trading system.