Kenya, US agree to initiate plans on new trade deal as AGOA winds down in September

Kenya and the United States have agreed to begin the process of negotiating a reciprocal trade deal as Trump’s administration doubles down on protectionism.

The agreement sets stage for a new era of bilateral economic engagement as the current African Growth and Opportunity Act (AGOA) deal nears its expiry in September.

It follows the high-level meeting held in Washington, DC this week, where Cabinet Secretary for Investments, Trade and Industry, Lee Kinyanjui, led a delegation in discussions with US Trade Representative (USTR), Ambassador Jamieson Greer.

The meeting builds on earlier talks held between the two states in March and May 2025.

The talks, described by both sides as productive and forward-looking, underscored the urgency and mutual interest in establishing a structured and mutually beneficial trade framework.

"Kenya is deeply interested in the commencement of formal negotiations with the US government. A reciprocal trade agreement is crucial for securing long-term access to the US market for Kenyan products and will provide the stability needed to unlock new investments,” Kinyanjui said.

“A number of US firms have already expressed strong interest in establishing or expanding their operations in Kenya, and this framework will be a key enabler for that growth," he added.

Ambassador Greer echoed the sentiment, praising Kenya’s proactive approach and reaffirming the US’s readiness to pursue a trade pact that aligns with both nations' economic priorities.

“Let's build a partnership that leverages on the growth of the manufacturing sector in America while providing a market for Kenyan products which cannot be sourced locally,” Greer said.

Kenya exported goods worth approximately $1.5 billion (Sh193.8 billion) to the US in 2024, making the US one of its top trading partners.

The Ministry therefore argues that transitioning from AGOA to a reciprocal agreement would broaden trade relations by introducing new sectors and investment channels.

Kenya is particularly keen to expand market access for its textile, agricultural and technology sectors.

During the first half of President Donald Trump’s second term, familiar themes of his “America First” policy have continued to dominate the administration’s agenda.

In April 2025, Trump announced a set of tariffs to the highs of 125 per cent, targeting various imports, including countries that the US viewed as having unbalanced trade practices or failing to provide reciprocal access for American goods and services.

The decision was later paused and the rates cut to the baseline of 10 per cent for 90 days to allow trade negotiations with those countries.

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• US agree to initiate plans on new trade deal as AGOA winds down in September

Following the expiry of the initial 90-day suspension of tariffs on July 9, 2025, and a subsequent extension to August 1, 2025, Trump has issued a new Executive Order revising the reciprocal tariff rates.

On July 31, he imposed additional ad valorem duties on the goods of certain trading partners, substituting the additional duties previously imposed.

Trump further announced that his administration will maintain a flat 10 per cent tariff on all goods imported into the US.

Although Kenya is subject to the lowest tariff rate of 10 per cent, the imposition of this rate is already having a significant impact on the local economy.

Kenya's exports

Data by the Kenya National Bureau of Statistics (KNBS) shows Kenya’s exports to the US under AGOA were valued approximately Sh60.6 billion in 2024, up from Sh50.8 billion in 2023.

The statistics further reveal that employment in AGOA-accredited export firms rose to 66,804 in 2024, a 15.18 per cent year-on-year increase from the previous year.

In alignment with KNBS, the World Bank and ICE Italian Trade Agency note that over 70 per cent of Kenyan textile and apparel exports are to the US market, supporting 75,598 workers in Export Processing Zones.

These jobs are therefore at peril under Trump-era tariffs.

According to Juma Mukhwana, Principal Secretary (PS) for the State Department of Industry in the Ministry of Investments, Trade and Industry, the measures announced by President Trump will have wide-ranging implications for Kenya’s economy.

He remarks that AGOA has historically provided duty-free access for over 6,000 Kenyan products and exports from 32 sub-Saharan African countries to the US market.