Why Kenya's zero-tariff deal with China is up in the air

President William Ruto with Prime Minister Li Qiang, after a meeting at the Great Hall of the People in Beijing, China. [PCS]

Plans by Kenya and China to ink a landmark trade agreement designed to provide a critical lifeline to local exporters have been cast into a state of geopolitical limbo. 

Documents seen by The Sunday Standard, and sources who spoke to this writer, reveal that the finalised text of the "Early Harvest" deal is gathering dust on the Ministry of Trade shelves in Nairobi.

According to insiders, this paralysis comes after Washington's move to explicitly peg the extension of its own trade preferences to a high-stakes strategy of containing Beijing’s influence on the continent. 

The document, titled the "Early Harvest Arrangement for the Agreement on Economic Partnership for Shared Development Between the Government of the People’s Republic of China and the Government of Kenya," represents a strategic pivot for President William Ruto’s administration.

Technical work for the deal was completed in late 2025 after both sides in Beijing and Nairobi agreed to the final text. 

However, the deal is now awaiting a "triple-nod" from the Cabinet, the Presidency, and Parliament—a process that has ground to a halt.

High-level sources indicated that the "limbo" is a direct consequence of intensifying pressure from the United States, which has framed the renewal of the African Growth and Opportunity Act (AGOA) as a tool for economic warfare. 

Unlike previous iterations of the AGOA trade programme, which were primarily viewed as development tools, the current push for renewal in Washington is now seen to also be about defence. 

On December 30, 2025, the US House Committee on Ways and Means reported HR 6500, the legislative framework for the AGOA Extension Act, which seeks to extend the programme through December 31, 2028.

Internal congressional documents and a "One-Pager" from the committee reviewed by The Sunday Standard explicitly link this extension to the "containment" of Chinese interests. 

The committee warns that Africa holds approximately 30 per cent of the world's critical mineral resources—the raw materials essential for everything from electric vehicle batteries to advanced missile systems.

American lawmakers alleged that China has already invested $8 (Sh1.03 trillion) to $10 billion  (Sh1.29 trillion) in Africa specifically to "monopolise these essential supply chains." 

“China celebrates when America takes a step back from the continent, and extending these programs ensures that won’t happen,” stated Chairman Jason Smith. 

By framing AGOA as "one of our most valuable tools for securing our long-term economic and national security," Washington is seen by economists and foreign policy experts to effectively place a "strategic peg" on the deal.  

The American lawmakers have said plainly that under the new AGOA framework,  African "beneficiaries do not undermine US national security or foreign policy interests"—a thinly veiled reference to any deepening of ties with Beijing, with countries like Kenya, which is angling for the AGOA extension.  

But for Kenyan farmers and manufacturers, the "Early Harvest" Chinese tariff deal is seen as equally vital.  

In simple terms, a "Zero-Tariff" deal means the removal of "customs duties"—the taxes a government levies on imported goods. 

Currently, Kenyan products like specialty tea, coffee, and macadamia nuts face significant hurdles entering the Chinese market.  

Under the "Early Harvest" arrangement, China offers duty-free access for 100 per cent of tariff lines (the specific categories used to classify every single type of product in trade) for 53 African countries, including Kenya. 

This represents a vital opportunity to correct a staggering trade deficit—the gap between what a country buys and what it sells.  

In 2024, Kenyan  imports from China surged to $4.44 billion (Sh576.1 billion), while exports to Beijing stood at a mere $202 million (Sh26.3 billion).  

The "Early Harvest" text promises to bridge this gap, yet it now remains "stuck" in Nairobi’s bureaucratic machinery, sources said.  

"Every week of delay translates to lost opportunity," said one Kenyan exporter. "The US is offering a promise of future access, but China has the finalised text ready to sign today." 

Washington’s attempt to force a choice between superpowers is not a new strategy, and observers note it has faced a steep uphill battle in the past. 

In recent years, the US launched a global campaign to persuade African nations to drop Huawei, the Chinese telecommunications giant, from their 5G network infrastructure, citing national security risks.  

However, the effort largely failed to gain traction. For many African nations, Huawei offered affordable, high-quality infrastructure that the US could not match or fund. 

As a result, Huawei is seen to remain a dominant provider of 4G and 5G technology in Kenya.  

Analysts warn that if the US continues to peg trade deals to "anti-China" clauses without providing a superior economic alternative, it risks repeating the Huawei failure. 

The pressure on Nairobi is amplified at a time when the lapse of AGOA on September 30, 2025, exposed Kenyan apparel to US tariffs of up to 10 per cent. 

For Kenyan firms currently paying high duties to enter the US, the AGOA pact extension under the new legislation, HR 6500, equally offers an attractive technical olive branch known as "Retroactive Application." 

Section 2(b) of the bill states that any goods entered after the September 2025 lapse can be "reliquidated" once the act is signed into law. 

“Reliquidation" is a process where the government recalculates the taxes owed on an import and issues a refund.  

If a Kenyan firm, for instance, paid a 10 per cent tariff in October 2025, it can request a refund of those duties. 

However, this relief is not automatic as importers must file a request within 180 days.  

While this provides "much-needed certainty," the three-year extension to December 31, 2028, is viewed by some as a "holding pattern" rather than a permanent solution. 

Amid the high-level geopolitical jostling, those on the ground are pleading for a pragmatic approach. 

A large-scale flower farmer based in Naivasha, who spoke on condition of anonymity to avoid government reprisal, expressed frustration with the current stalemate. 

"We want Kenya to clinch all the deals—we are not keen on these trade wars," the farmer said.

"We just want to do business in the US and China and expand into new markets wherever they may be. Our flowers don't care about politics; they just need a buyer." 

A deal with China is envisaged to open a market for Kenyans agricultural produce, including coffee, tea and avocados. 

China, with a population of about 1.4 billion people, offers Kenya a perfect alternative to the US market, especially in the absence of AGOA safeguards. 

However, experts say Kenya is currently "walking on thin ice," trying to maintain its traditional security and trade ties with the West while reaching for the immediate economic relief offered by the East. 

Efforts to get a comment from the State Department of Trade did not bear fruit by press time. 

The Sunday Standard could not immediately reach the White House or members of the US House Committee on Ways and Means for further clarification on the perceived China "containment" clauses for any new beneficiaries of AGOA.