Kenya and China finalize trade agreement with tariff reductions
Written by Black Hot Fire Network Team on January 15, 2026
Kenya has announced a new trade agreement with China to facilitate the export of Kenyan produce, aiming to stimulate economic growth and create employment opportunities. This follows previous negotiations regarding trade agreements with China.
New Trade Agreement with China
Trade and Industry Cabinet Secretary Lee Kinyanjui announced that Kenya has entered into a bilateral trade agreement with China. Nairobi had previously expressed reservations about an earlier deal that it considered to disadvantage Kenya, given its economic growth trajectory. The government has been actively seeking to expand its export markets and reduce trade imbalances.
Previously, China’s duty-free and quota-free (DFQF) market access primarily benefited Least Developed Countries (LDCs) within Africa, creating a disadvantage for developing countries like Kenya. To address this, Kenya initiated discussions with China to negotiate a bilateral agreement aligning with privileges enjoyed by the East African Community and other African nations.
The resulting preliminary agreement allows for 98.2 percent zero-duty market access for Kenyan goods. This framework is expected to unlock economic potential for Kenyan exporters, particularly in the agricultural sector, and generate employment opportunities.
African Growth and Opportunity Act (AGOA) Extension
The United States House of Representatives has passed a bill extending the African Growth and Opportunity Act (AGOA) for three years. Kinyanjui welcomed the extension, emphasizing its importance for US-Africa trade relations and the renewed certainty it provides to Kenya’s textile and apparel industry.
The textile and apparel industries within Export Processing Zones (EPZs) in Kenya directly employ over 80,000 people and indirectly support an additional 250,000. The government aims to broaden Kenya’s exports under AGOA beyond textiles and apparel to maximize job creation and income generation. Discussions are also underway regarding a bilateral trade agreement with the US covering other key sectors.
During a recent visit by President William Ruto to Washington, D.C., Kenya’s request for enhanced market access to the US was discussed. Kenya’s major exports to the US include textiles and apparel, coffee, tea, horticultural products, and tourism services.
Trade Dynamics with China
China’s zero-tariff (DFQF) treatment, previously applied to Least Developed Countries (LDCs), was expanded to 100 percent of tariff lines effective December 2024, as notified to the World Trade Organization (WTO) in 2025. Kenya, classified as a developing country, is not covered by this unilateral LDC scheme, necessitating the bilateral framework.
According to UN COMTRADE data, Kenya’s goods imports from China totaled $4.31 billion (Sh555 billion) in 2024, primarily consisting of electrical and electronic equipment, machinery, plastics, vehicles, and steel. Kenya’s trade deficit with China reached Sh475.6 billion in the first nine months of 2025, with imports from China totaling Sh489 billion and exports at Sh13.4 billion, according to data from the Kenya National Bureau of Statistics (KNBS).
KNBS data consistently identifies China as Kenya’s top import source, surpassing the UAE and India. Kenyan exporters face challenges including phytosanitary and quality-assurance compliance costs, limited direct logistics, and freight volatility, which impact delivery prices and margins.
