Kenya Pauses China Pact Amid US Trade Squeeze
President William Ruto has suspended a key trade deal with China under mounting pressure from the United States.
This decision prioritizes Kenya’s access to vital US markets amid economic uncertainties.
This decision comes as the government balances strategic trade relations between the two countries and ongoing diplomatic considerations.
Background on the Trade Deal
The proposed agreement with China aimed to eliminate tariffs on Kenyan exports like tea, coffee, and avocados, offering a buffer against losses from the expired African Growth and Opportunity Act (AGOA).
AGOA, which lapsed on September 30, 2025, previously allowed duty-free access for Kenyan goods worth over $600 million annually to the US, mainly apparel and agricultural products.
Without renewal, tariffs up to 28% now threaten over 66,000 jobs in textiles and farming, prompting Kenya to seek a successor program like the Strategic Trade and Investment Partnership.
Agricultural exporters, particularly smallholder farmers supplying horticultural products, also risked losing key contracts due to higher costs and reduced market access.
Kenya’s government has been actively engaging with the United States authorities to negotiate a renewal or extension of AGOA benefits.
US Influence and AGOA Stakes
US officials warned that proceeding with the China deal could jeopardize Kenya’s eligibility for renewed preferential trade terms.
The suspension halts the pact at cabinet, parliamentary, and presidential approval stages, reflecting Nairobi’s delicate balancing act between superpowers.
China holds significant Kenyan debt, while the US remains a key security and export partner, amplifying the diplomatic tensions.
Farmers and manufacturers face immediate risks without diversified markets, as the China deal promised new outlets for cash crops.
Job losses loom large if AGOA talks falter, hitting export-dependent sectors hard amid rising domestic costs
Broader East African trade dynamics could shift, with Kenya’s move signaling caution in Beijing ties post-Belt and Road Initiative challenges.
Kenya’s pivot echoes smaller nations’ struggles in US-China rivalries, where economic incentives clash with strategic alignments.
Recent US-China tariff pauses offer hope, but Nairobi must navigate independently to protect interests. As President Trump pushes America First policies, African partners like Kenya weigh long-term gains against short-term pressures.