Boon for exporters as Kenya inches closer to China tariff deal

President William Ruto with his Chinese counterpart Xi Jinping at the Great Hall of the People in Beijing, China. [PCS] Kenyan exporters are poised for a major win as Nairobi and Beijing work to finalise a zero-tariff deal, a crucial new market lifeline as duty-free access to the United States fades following the expiry of a key trade pact. The deal, which sources say is in the offing, would grant Kenyan products like tea, coffee, and avocados unprecedented duty-free access to China's vast market of over a billion people. "This is the opportunity we have been looking for," a senior Kenyan trade official, speaking on condition of anonymity, told Sunday Standard on Friday evening. "The Chinese market is now open, and our focus is on ensuring our farmers and processors are ready to meet the demand." The deal will come as a direct strategic counterweight to the expiration of the US African Growth and Opportunity Act (Agoa), which had previously granted Kenya tariff-free access for key exports. "It's a necessary short-term bridge. It plugs a hole left by Agoa, but the real test is whether Kenya can use it as a runway to build a more diverse and value-added export economy," added the official. The expiry of AGOA has exposed Kenyan goods, particularly apparel, to US tariffs of up to 28 per cent, threatening an export sector that supports tens of thousands of jobs. This uncertainty has created an opening for China to consolidate its role as Africa's dominant trade partner, trade reached a record $295.56 billion (Sh38.07 trillion) in 2024 by offering predictable market access. Following a state visit by President William Ruto, China lifted tariffs on key Kenyan agricultural products. President Ruto has unveiled an ambitious plan to triple Kenya's tea earnings to over $2 billion (257.8 billion) by 2027, backed by the new trade opportunities with China. Despite the progress, the finalisation of the bilateral deal had previously stalled, creating anxiety among exporters. Since the policy's implementation, Chinese imports from the least-developed countries reached $21.42 billion (Sh2.761 trillion) by March 2025, a 15.2 per cent year-on-year increase. For China, the expanded tariff policy is both an economic and diplomatic instrument, positioning itself as an open partner to the Global South, analysts say. The push accelerates China's broader policy to grant zero-tariff treatment on 98 per cent of tariff lines, moving toward 100 per cent to African nations with which it has diplomatic ties. Chinese officials had previously noted a slow uptake from Kenya and African businesses and urged them to be more proactive in seizing the "golden opportunity". Kenya faces a huge trade imbalance with China. In 2023, Kenya's imports from China were valued at approximately $4.66 billion, while its exports stood at only $290 million (Sh37.38 billion). Analysts have, however, cautioned that preferential access alone does not guarantee competitiveness or structural economic transformation. "Kenya will need to boost manufacturing capacity, address non-tariff barriers, and integrate into global value chains to fully capitalise on the initiative," an analyst familiar with the negotiations noted. Kenya's trade policy is navigating a complex geopolitical landscape, analysts say. While pursuing the China deal, Nairobi is also engaged in talks with the US for a modern, investment-led partnership to succeed AGOA. Cabinet Secretary Lee Kinyanjui earlier urged a focus on building resilient frameworks through Special Economic Zones and attracting new investments. At the same time, the Kenya Kwanza government reckons that regional integration within the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA) is a critical strategy for long-term resilience. A section of business leaders and traders had earlier protested that Nairobi is "dragging its feet in implementing the new deal," fearing that bureaucratic delays in Nairobi will squander the immediate competitive advantage. This frustration is exacerbated by the pressing need for a new market, they had warned. The recent expiration of the AGOA has left exporters, particularly those in the labour-intensive textile and horticulture sectors, facing an uncertain trade future with the US. The Beijing zero-tariff deal is meant to immediately open China's market of 1.4 billion consumers, helping to address Kenya's massive trade imbalance with Beijing, which is its largest source of imports. "Any delay prevents businesses from pivoting their supply chains and marketing efforts towards high-demand Chinese niche products like specialty coffee, macadamia nuts, and avocados," said a business leader who sought anonymity. Prime Cabinet Secretary Musalia Mudavadi earlier confirmed that a Kenyan delegation is already negotiating the technical framework. The Sunday Standard could not immediately reach his office for comment. Business leaders had said they are anxious ahead of year-end, with no end in sight for the conclusion of the trade deal. "Every week of delay translates to lost opportunity and prolonged uncertainty in a volatile global trading arena," said one manufacturer speaking anonymously to speak freely. "We hope for swift action as the year comes to an end so we can secure new markets." On June 11, 2025, at the China-Africa Economic and Trade Expo in Changsha, China, the country announced a sweeping trade commitment to remove all tariffs on exports from 53 African countries. This move grants African nations duty-free access to the world's second-largest economy, potentially lowering export costs and making African goods more competitive in the Chinese market. For the first time, this access would extend not only to the least developed economies but also to middle-income countries such as South Africa, Kenya, Nigeria, and Egypt. As US trade tensions escalate, Kenya has, in recent years, deepened its economic ties with China, leveraging Beijing's expanded zero-tariff policy for African goods. President Ruto's April state visit to China yielded 22 new agreements, including infrastructure deals and pledges to boost Kenyan agricultural exports like coffee and avocados. During his visit, Kenya and China elevated their relationship to a strategic partnership and signed 22 Memoranda of Understanding (MoUs) across infrastructure, trade, health, and security. These agreements included crucial commitments to extend Kenya's Standard Gauge Railway (SGR) beyond Kisumu to Malaba and dual the Nairobi-Malaba road from Limuru, both cornerstones of China's Belt and Road Initiative in East Africa. Discussions also covered direct air links and increased imports of Kenyan produce by China, particularly coffee and avocados. "China offers an alternative market at a critical time," said Trade CS Mr Kinyanjui, even as he acknowledged the "challenges" posed by US tariffs. For the longest period, the trade balance between Kenya and China has been heavily skewed in Beijing's favour. Kenyan imports from China have surged dramatically over recent years, climbing by more than half to $4.44 billion (Sh576.1 billion) in 2024 from $2.78 billion (Sh361.3 billion) in 2020. This trend was underscored by a 25 per cent year-on-year increase from $3.53 billion (Sh458.9 billion) in 2023, with machinery and transport equipment forming the bulk of these inbound shipments. While Kenya's exports to China also saw a notable increase, jumping 77.8 per cent to $202 million (Sh26.3 billion) in 2024 from $113 million (Sh14.7 billion) in 2023, this growth was overshadowed by a 9.12 per cent year-on-year drop from the $222 million (Sh28.9 billion) recorded in 2023, further exacerbating the trade deficit. "China's decision to negotiate and sign the China-Africa Economic Partnership for Shared Development, offering zero-tariff treatment on 100 per cent of tariff lines for 53 African countries with which it holds diplomatic ties, marks a historic milestone," stated Shen Shiwei, a China watcher and non-resident researcher at the Institute of African Studies of Zhejiang Normal University, in emailed comments to The Sunday Standard. "As a leading global player and the first major developing economy to implement such a sweeping initiative, China demonstrates not only its commitment to South-South cooperation but also its role as a catalyst for equitable global development.

Boon for exporters as Kenya inches closer to China tariff deal

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