Kenya has reached a landmark preliminary trade arrangement with China granting duty-free access to more than 98% of its exports, a move expected to significantly reshape trade flows, logistics corridors and supply chains between East Africa and Asia.
A strategic breakthrough in Kenya–China trade relations
Nairobi and Beijing have concluded an “early harvest” trade framework that allows 98.2% of Kenyan exports to enter the Chinese market free of customs duties. Announced by Kenya’s Ministry of Trade, the agreement represents a major step toward correcting the country’s long-standing trade imbalance with China and strengthening its position in African trade, logistics and supply chain networks.
The deal, concluded less than a month after negotiations closed on December 19, provides immediate benefits for Kenya’s core export sectors, including coffee, tea and cut flowers, which form the backbone of the country’s agricultural economy and its export-oriented supply chain.
Boosting agricultural exports and supply chain diversification
According to Trade Cabinet Secretary Lee Kinyanjui, the duty-free framework marks “a monumental progression” in bilateral relations and signals China’s commitment to deepening economic ties with Kenya.
Zero-duty access is expected to unlock new opportunities for Kenyan exporters, enabling diversification of the export basket and strengthening the country’s agricultural supply chain, from production zones to ports, airports and international logistics corridors.
Agriculture remains central to Kenya’s economy, employment and export revenues. Enhanced access to the Chinese market could stimulate investment in cold chain logistics, air freight capacity, and port infrastructure, reinforcing Kenya’s role as a logistics hub in East Africa.
Addressing trade distortions in East Africa
Trade analysts note that Kenya’s exclusion from China’s duty-free scheme for Africa’s least developed countries — following its graduation to middle-income status in 2014 — had created structural distortions within the region.
Lauren Johnston, a China–Africa specialist at the AustChina Institute, explains that while Kenya trades freely within East Africa, neighboring countries already enjoy preferential access to China. This imbalance risked encouraging indirect trade routes, with Kenyan goods transiting through third countries to access the Chinese market duty-free.
The new framework is therefore expected to streamline regional trade flows, reduce inefficiencies and strengthen regional logistics integration.
A trade deficit Kenya aims to rebalance
The agreement comes against the backdrop of a stark trade imbalance. In 2023, Kenya exported goods worth US$225 million to China, primarily titanium ore and nuts, while imports from China reached US$5.97 billion, dominated by telecommunication equipment and iron products, according to the Observatory of Economic Complexity.
By expanding exports of coffee, tea, avocados, macadamia nuts, seafood and cut flowers, Kenya aims to rebalance trade and generate higher value across its export logistics and supply chain ecosystem.
“This is a very smart, forward-facing outcome,” said Aly-Khan Satchu, a sub-Saharan Africa geo-economic analyst, noting that the deal allows Kenya to better leverage its agricultural strengths within global supply chains.
Balancing China and US trade relationships
The announcement comes amid reports that the United States had urged Kenya to abandon the China deal in exchange for renewed duty-free access under the African Growth and Opportunity Act (AGOA), which expired last year.
Kenyan authorities have firmly denied any delay or diplomatic pressure. Korir Sing’Oei, Principal Secretary for Foreign Affairs, dismissed claims of tension, emphasizing that Kenya is simultaneously pursuing trade partnerships with both China and the United States.
Kenya and China have already exchanged tariff schedules and agreed on rules of origin, enabling preferential trade under the interim framework while negotiations continue toward a comprehensive Economic Partnership Agreement (EPA) targeting full market access.
AGOA extension eases pressure on Kenya’s exporters
In a significant development for African exporters, the US House of Representatives has voted to extend AGOA for three years, until 2028, pending Senate and presidential approval.
The extension offers relief to Kenya’s apparel sector, which exports nearly US$600 million annually to the US and employs tens of thousands of workers. According to Kinyanjui, the renewed AGOA window will allow Kenya to diversify exports beyond textiles, reducing overreliance on a single market.
A logistics and trade inflection point for East Africa
Kenya’s duty-free access deal with China represents more than a tariff concession. It marks a strategic inflection point for African trade, logistics and supply chains, with far-reaching implications for export competitiveness, transport corridors and regional integration.
If successfully implemented, the framework could strengthen Kenya’s role as a gateway between Africa and Asia, stimulate investment in transport and logistics infrastructure, and accelerate the country’s integration into global value chains — a critical step for sustainable growth in African trade and supply chain development.
