East or West? Kenya insists China trade deal on track amid US tensions

President William Ruto with his Chinese counterpart Xi Jinping at the Great Hall of the People in Beijing, China, on April 24, 2025. [File, Standard]

The government now says a landmark trade agreement with China remains on track, dismissing as "completely unfounded" concerns that geopolitical tensions with the United States have stalled the long-delayed deal.

This comes even as Washington explicitly ties the renewal of the crucial African Growth and Opportunity Act (AGOA) to a strategy of containing Beijing’s influence on the continent.

The Standard had exclusively reported that these rising tensions had paralysed the signing of Kenya’s “Early Harvest” deal with China.

On Tuesday, Foreign Affairs Principal Secretary Korir Sing’Oei moved to quell those concerns.

“This report is completely unfounded,” Sing’Oei stated, citing concrete progress.

“On 19th December 2025—our teams working during the holiday season—concluded negotiations of an Early Harvest Arrangement.”

He clarified that this interim pact is designed to kickstart preferential trade while a full economic partnership is finalised, confirming the exchange of tariff schedules and agreed rules of origin.

He did not, however, provide a specific expected signing date by press time when reached by The Standard. 

Nairobi’s position was declared just as the US House of Representatives passed the AGOA Extension Act (HR 6500) in a decisive 340-54 vote, opening the door for the renewal of AGOA through 2028. 

While offering a vital lifeline for Kenyan exporters to reclaim duty-free access to the US market, the bill strategically frames the programme as a tool for economic competition with China, placing nations like Kenya in a delicate diplomatic bind.

On the perceived ultimatum and friction with the US, Sing’Oei struck a confident tone: “We see no tension between our concluding a market access arrangement with China on one hand and our robust push for AGOA re-authorisation as well as a separate Bilateral Trade Agreement with the United States on the other.”

Despite this official optimism, analysts point to a hardening US stance embedded in the new AGOA legislation.

Internal documents from the House Committee on Ways and Means explicitly link the three-year extension to the “containment” of Chinese interests, warning that Beijing has invested billions to “monopolise” Africa’s critical mineral supply chains.

“AGOA is one of our most valuable tools for securing our long-term economic and national security,” the committee noted, ensuring beneficiaries “do not undermine US national security or foreign policy interests.”

For Kenya, the balancing act carries enormous economic stakes. In 2024, Kenyan apparel exports under AGOA reached $737.3 million (Sh95.3 billion), supporting over 66,800 direct jobs.

Concurrently, Kenya faces a staggering trade deficit with Beijing, importing Sh576.1 billion from China in 2024 while exporting only Sh26.3 billion.

The “Early Harvest” deal aims to correct this imbalance by granting zero-tariff access for Kenyan agricultural exports like coffee and avocados.

The US bill does offer a technical reprieve: a “reliquidation” clause allows Kenyan firms to apply for refunds on tariffs paid since AGOA lapsed in September 2025, if they file within 180 days of the law’s enactment.

While PS Sing’Oei maintains there is “no tension,” analysts warn Kenya is “walking on thin ice.”

The US framing of AGOA as a bulwark against “malign actors like China” suggests Nairobi’s pivot toward Beijing will face intense scrutiny from the US.

Some observers also view the shorter three-year renewal as a “holding pattern” for the Trump administration to negotiate deeper, potentially more restrictive reforms.

Kenyan exporters expressed cautious hope. “We want Kenya to clinch all the deals,” said a large-scale flower farmer in Naivasha. “Our flowers don't care about politics; they just need a buyer.”

As the bill advances to the US Senate, analysts say Nairobi remains entrenched in a high-stakes standoff, striving to secure its industrial future in the West while pushing open its agricultural doors to the East.

The government on Wednesday welcomed the US House vote to renew the AGOA, stating it would end damaging uncertainty for a vital employment sector. 

In a press release, Trade Cabinet Secretary Lee Kinyanjui said the extension marked “a critical milestone in US-Africa trade relations.”

“The uncertainty that had previously engulfed the sector will now give way to renewed confidence and expansion,” Kinyanjui said. 

He emphasised the high stakes for local industry, noting that textile and apparel firms operating within Kenya’s Export Processing Zones (EPZs) directly employ over 80,000 people and support an additional 250,000 indirect jobs.

The ministry stated its intention to use the renewal to broaden Kenya’s export portfolio under the trade pact. “We aim to grow exports of additional products under the AGOA framework beyond textiles, ensuring that Kenya fully leverages this opportunity to create jobs and generate wealth,” the release said. 

The ministry revealed ongoing discussions with Washington on a separate, strategic bilateral trade agreement.