AGOA Lifeline to 2028 and a China Deal in Motion: Kenya's Two-Track Trade Strategy

• AGOA extended to 31 December 2028: passed by the US Senate on 8 August, signed on 4 September 2026, and welcomed the same day by Trade CS Lee Kinyanjui.

• Same rules: existing eligibility, product coverage and the third-country fabric provision for apparel are retained.

• Retroactive refunds: general customs duties paid on qualifying entries during the lapse after 30 September 2025 can be reclaimed through US Customs, with processing within 90 days. Reciprocal tariffs, fees and interest are excluded.

• Kenya's stake: AGOA apparel exports were worth about Sh60.6 billion in 2024; apparel is about 70% of Kenya's exports to the US, and EPZ apparel firms employ more than 66,000 people.

• China Early Harvest: in force since May 2026, it gives duty-free access to about 98.2% of Chinese tariff lines, alongside China's zero-tariff offer to 53 African countries from 1 May.

• CADEPA next: Prime CS Musalia Mudavadi says Kenya is ready to begin comprehensive negotiations. A full agreement is not yet signed, and Kenya is expected to open its own market in return.

• Trade-law issues: the fragility of unilateral preferences, rules of origin and SPS barriers, EAC Common External Tariff constraints on bilateral concessions, and WTO rules for reciprocal agreements.

What AGOA is: The African Growth and Opportunity Act, enacted by the United States in 2000, grants duty-free access to the US market for more than 6,000 product lines from eligible sub-Saharan African countries. It is a unilateral preference: Washington grants it, sets the eligibility conditions, and can withdraw or let it lapse. Kenya gives nothing in return under AGOA itself.

A turbulent two years:

What the extension provides:

Kenya's exposure. Apparel is the heart of Kenya's AGOA trade:

• Apparel is about 70% of Kenya's total exports to the US, and more than 70% of its textile and apparel exports go to the US.

• AGOA apparel exports were worth about Sh60.6 billion in 2024, according to Economic Survey figures cited by the Trade Ministry.

• The 43 Export Processing Zone apparel firms employ more than 66,000 Kenyans directly.

• Beyond apparel, AGOA supports duty-free entry for cut flowers, tea, coffee and macadamia nuts.

The limits of the lifeline. AGOA removes ordinary US customs duties on eligible goods. It does not by itself shield Kenyan goods from other US tariff measures, which is why the refund carve-outs matter. The extension also runs out at the end of 2028, so the question of a longer-term, reciprocal arrangement with the US remains open.

The framework. CADEPA, the China–Africa Development Economic Partnership Agreement (also called the Agreement on Economic Partnership for Shared Development), is China's model for bilateral economic partnership agreements with African states. Negotiators describe a concluded CADEPA as equivalent to a full free trade agreement. Kenya is among the first African countries to formalise its first stage.

How it unfolded:

Reading the two statements together. The March remark is best read as referring to the Early Harvest Agreement, an interim, tariff-focused package. On 30 September, Mudavadi described the next stage: comprehensive negotiations covering everything else a full agreement would contain. The broader agreement has not yet been negotiated or signed.

What the Early Harvest gives Kenya. Duty-free access to China for about 98.2% of Chinese tariff lines. Coffee, tea, avocados, macadamia nuts, flowers and horticultural products are among the beneficiaries. According to China's ambassador, Guo Haiyan, avocado oil exports have risen about 700%, coffee exports have nearly doubled, and aquatic products, including sea cucumbers, are up about 350%.

What Kenya offers in return. Unlike AGOA, the arrangement is not one-way. Reports indicate that Kenya will also open its market further to Chinese goods. The scope of Kenya's concessions, and how they sit with its EAC Common External Tariff obligations, are central questions for the comprehensive talks.

The imbalance it aims to address. In 2024, Kenya imported about US$4.3 billion of goods from China, mostly machinery, electronics and vehicles, while exporting about US$197 million, mostly primary commodities. The government's stated aim is to raise export volumes and move Kenyan exports up the value chain.

1. The fragility of unilateral preferences

AGOA's value is high, but so is its uncertainty. Eligibility depends on criteria set by US law, including market-economy and rule-of-law conditions and a requirement not to undermine US national security or foreign policy interests, assessed in annual reviews. Congress can let the programme lapse, as it did in 2025, or attach new conditions. AGOA also does not shield Kenyan goods from other US tariff tools, which is why the refund provision excludes specialised reciprocal tariffs. Two years of predictability is valuable, but it is not a long-term guarantee.

2. Rules of origin decide who actually benefits

Preferences only help goods that qualify. For AGOA apparel, the third-country fabric provision is decisive: it lets Kenyan factories use imported fabric, often from Asia, and still qualify. Most non-apparel goods must meet AGOA's value-content rules. Under the China arrangement, Kenyan goods will need to meet China's origin and sanitary and phytosanitary (SPS) requirements. For agricultural products, those include market-access protocols and registration with Chinese customs. Zero tariffs do not remove those conditions.

3. The EAC constraint on reciprocal deals

Kenya is part of the EAC Customs Union, with a Common External Tariff applied by all Partner States. That limits how far Kenya can unilaterally cut its own tariffs for Chinese goods. Concessions on the Kenyan side will need to be designed with the CET in mind, through mechanisms the EAC framework allows, or coordinated with Partner States. The same issue arose when Kenya pursued bilateral trade talks with the US. It will be a central legal question in comprehensive CADEPA negotiations.

4. WTO and preference erosion

Under WTO rules, a full reciprocal agreement between Kenya and China would generally need to cover substantially all trade to qualify as a free trade area under GATT Article XXIV, although arrangements among developing countries can also be notified under the more flexible Enabling Clause. Early Harvest arrangements are typically treated as interim steps towards that end. Meanwhile, China's zero-tariff offer to 53 African countries means Kenya's tariff advantage over other African exporters in China is limited. The distinctive value of a Kenyan CADEPA lies in legal certainty, binding commitments and the non-tariff provisions a comprehensive agreement could add.

5. AfCFTA and diversification

The two tracks sit alongside Kenya's African Continental Free Trade Area commitments. Better access to the US and China does not replace regional integration. Firms that build supply chains within Africa may gain under AfCFTA rules of origin while selling into both markets.

Apparel manufacturers and EPZ firms

The biggest winners of the AGOA extension. Two years of certainty lets factories accept multi-season orders from US brands, commit to new capacity and keep workforces in place. The third-country fabric provision continues, so current sourcing models remain viable. But the horizon is short. Firms should use the period to diversify buyers, explore EU and regional markets, and invest in local or regional fabric supply in case future AGOA terms tighten.

Apparel workers

For more than 66,000 workers in EPZ apparel factories, the extension removes the immediate risk of mass layoffs. Job security beyond 2028 depends on whether a longer-term US arrangement is secured.

Exporters who shipped during the AGOA lapse

Exporters, or more precisely their US importers of record, can claim refunds of general customs duties paid on qualifying entries during the lapse, through US Customs and Border Protection, to be processed within 90 days. Interest, merchandise processing fees, trade-remedy duties and specialised reciprocal tariffs are excluded. Kenyan exporters should work with their US buyers, who usually paid the duty, to identify entries, file claims and agree how refunds are shared under their contracts. The Trade Ministry has said it will support the process.

Agricultural exporters (coffee, tea, avocados, macadamia, flowers, horticulture)

This group gains on both tracks: AGOA duty-free entry to the US, and zero tariffs into China. Early figures from China point to sharp growth in avocado oil, coffee and aquatic product exports. To capture it, exporters must clear China's SPS protocols and registration requirements and meet volume and quality expectations. Tariff removal is only the first step.

Manufacturers competing with Chinese imports

A comprehensive CADEPA would likely require Kenya to open its market further to Chinese goods. Local manufacturers of steel products, furniture, plastics, electronics assembly and similar goods should engage the Trade Ministry and business associations now, to seek sensitive-product lists, transition periods and safeguards. The EAC Common External Tariff gives some protection, but negotiated concessions could erode it.

Investors

AGOA certainty to 2028 supports investment in EPZ apparel and agro-processing aimed at the US. China's market opening may attract Chinese investment into Kenyan processing for export back to China. Investors should factor in AGOA's expiry date, the outcome of the CADEPA talks, and EAC tariff rules when choosing where to locate production.

Importers and consumers

If CADEPA leads to lower Kenyan tariffs on Chinese goods, importers and consumers could see cheaper machinery, electronics and vehicles. That would come at the expense of some local producers and customs revenue. No such reductions have been agreed yet.

Government and trade negotiators

The task is to turn a short-term US preference into something more durable, and to negotiate a comprehensive China agreement that protects sensitive sectors and fits within EAC obligations. Keeping both partners engaged without being forced to choose is the core diplomatic challenge.

EAC Partner States

Any Kenyan concessions to China that touch the Common External Tariff affect the whole customs union. Partner States will expect consultation and coordination.

Lawyers and trade advisers

The immediate work is AGOA refund claims and contract allocation of refunds. Alongside that come origin and SPS compliance for the China market, submissions on CADEPA negotiating positions, and EAC-consistency analysis of any Kenyan tariff commitments.

Practical steps now:

• Exporters to the US: compile entries made during the AGOA lapse, coordinate refund claims with US buyers, and review contract terms on who keeps the refund.

• Apparel firms: lock in orders to 2028 and start diversification and regional sourcing plans.

• Agricultural exporters: check registration and SPS compliance for China, and verify product eligibility under the Early Harvest.

• Manufacturers: prepare evidence on import sensitivity and engage the Trade Ministry before CADEPA negotiating positions are set.

• Advisers: track US and Chinese implementing measures and EAC consultations, and prepare clients for both tracks.

Until when is AGOA extended? To 31 December 2028. President Trump signed the extension on 4 September 2026.

Did the extension change AGOA's rules? No. It keeps the existing framework, eligibility requirements, product coverage and the third-country fabric provision for apparel.

Can exporters recover duties paid while AGOA had lapsed? Yes. The extension provides for refunds of eligible general customs duties paid on qualifying entries after the 30 September 2025 lapse, claimed through US Customs and Border Protection and to be processed within 90 days. Interest, processing fees, trade-remedy duties and specialised reciprocal tariffs are excluded.

What is the Kenya–China Early Harvest Agreement? An interim agreement under the China–Africa Development Economic Partnership Agreement (CADEPA). It gives Kenyan exports duty-free access to about 98.2% of Chinese tariff lines, effective May 2026.

Has Kenya signed a full trade agreement with China? Not yet. The Early Harvest Agreement is in force. On 30 September 2026, Prime CS Musalia Mudavadi said Kenya is ready to begin comprehensive CADEPA negotiations.

Will Kenya cut tariffs on Chinese goods? Reports indicate Kenya is expected to open its market further under the partnership, but the scope of any concessions will be settled in the comprehensive negotiations and must fit within the EAC Common External Tariff.