Kenya and the United States will resume bilateral trade negotiations from Monday through Thursday next week, according to Kenya’s Trade Minister Lee Kinyanjui. One or two follow-up sessions will “firm up deliberations.” At stake is not merely tariff schedules, but the structure of Kenya’s largest single export market outside Africa, a relationship that accounted for $737 million in Kenyan exports in 2024, 10% of total exports, entering the American economy.
This negotiation cycle is the continuation of a process launched in 2020 during the first term of the Trump administration, reframed under the Biden administration through a Strategic Trade and Investment Partnership (STIP), and now returning to the table following political transitions in both capitals. What unfolds next will shape Kenya’s export model, its industrial ambitions, and its geopolitical posture.
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Kenya’s nominal GDP in 2025 was estimated to be between $132 billion and $136 billion, keeping it the largest economy in East Africa. With GDP growth projected at 4.9% to 5.3% through 2027 and a population of approximately 53.3 million, the country has made notable strides in economic stability. Inflation has dropped to 4.4% as of January 2026, down from 7.7% in 2023, while the Kenyan shilling has strengthened significantly to between KSh 129 and 134 per USD. Public debt remains manageable at an estimated 65–70% of GDP.
In 2025, Kenya’s economic expansion was driven by agriculture and construction, with the latter growing by 6.7% in the third quarter, while mobile transactions surged to KSh 21.9 trillion, underscoring the country’s global fintech leadership. The broader macroeconomic profile is defined by moderate yet stable growth, a strengthening currency, and deep digital penetration, alongside persistent challenges such as high debt service burdens and a large informal employment sector, which accounted for 90% of new jobs in 2024. These dynamics form the backdrop for ongoing trade policy reforms.
Under the African Growth and Opportunity Act (AGOA), Kenya exported $737 million worth of goods to the United States in 2024, with leading products including apparel, tea, coffee, horticultural items, macadamia nuts, and titanium ores. While AGOA has provided valuable unilateral market access, its time-limited nature has prompted Kenya to seek a more durable trade arrangement. Kenya aims to secure long-term market certainty, protection from sudden tariff reimposition, and preferential access beyond AGOA’s expiration, alongside efforts to reduce non-tariff barriers that hinder trade.
For its part, the United States is pursuing greater reciprocity in market access, stronger investment protections, and commitments on digital trade standards and intellectual property enforcement. Labour and environmental compliance are also key priorities for the U.S. in the negotiations. The talks are focused on reaching either a comprehensive bilateral free trade agreement or a structured trade and investment partnership that would replace and build upon the AGOA framework.
Diplomatic ties between Kenya and the United States were established in 1964, with Kenya serving as a pro-Western anchor in East Africa during the Cold War. Following the 1998 Nairobi embassy bombing, counterterrorism cooperation intensified, and relations expanded after Kenya’s 2002 democratic transition to include governance reform and health systems strengthening. A historic milestone was reached in 2024 when Kenya became the first Sub-Saharan African country designated a Major Non-NATO Ally, institutionalising defence cooperation and elevating the strategic partnership.
The United States has made substantial contributions to Kenya’s development through health infrastructure investments via PEPFAR, security cooperation targeting Al-Shabaab and maritime security, and support for trade and private sector development. Kenya has also strengthened continental stability through engagements, including its intervention in Somalia, mediation in South Sudan, and leadership in the Multinational Security Support Mission in Haiti, all with U.S. backing. These endeavours have enhanced Kenya’s diplomatic capital and positioned it as a security anchor state.
Kenya is positioning itself as a continental trade leader through logistics infrastructure, including the Port of Mombasa expansion and Standard Gauge Railway, digital economy dominance with fintech leadership, and diversified trade agreements with the UK, EU, and UAE. Current developments relevant to U.S. negotiations include President Ruto’s “Road to Singapore” industrialisation plan, Kenya’s launch of a national carbon registry for climate finance, and continued growth as a top African startup destination, reinforcing its digital trade relevance.
The negotiations could result in a successful bilateral trade agreement offering tariff predictability and FDI inflows but risking domestic industry exposure, a limited Strategic Trade and Investment Partnership with partial harmonisation, or no deal beyond AGOA, which would create investor uncertainty. Structural challenges include debt service pressures, informal employment dominance, agricultural climate volatility, and compliance costs for Kenyan SMEs. Trade liberalisation without domestic competitiveness upgrading could potentially widen inequality.
Future opportunities include digital trade provisions where Kenya could anchor Africa-U.S. standards alignment, value-added manufacturing evolution, green supply chain integration, and leveraging AfCFTA as a regional export hub. The negotiations determine whether Kenya moves from preference-based access to rule-based integration, whether its export sector industrially diversifies, and whether it cements its reputation as Africa’s most reliable Western trade partner.
