The resumption of trade between the two nations is a welcome development according to both parties, assuming that the interests of both players are protected.
The overcoming tension between these two nations stems from the potential tax that could be imposed on their businesses if they began to trade with each other.
The United States has expressed a willingness to resume its trade pact with Kenya once a substantial government is formed under newly elected President William Ruto.
US Trade Representative Katherine Tai said, “What you see is that right now we’re pursuing a number of different initiatives, one of them in a very multilateral context in the Indo-Pacific,” U.S. Trade Representative Katherine Tai told The EastAfrican last week. . “What we are doing with Kenya is not due to a preference for bilateral over multilateral,” she added.
On the other hand, while America is skeptical of Kenyan tax laws, the United States has also noted that it has no plans to change its policy on second-hand clothing exports (mitumba) to Kenya despite plans to ban trade through increased cotton taxes by the East African Community.
Tai added, “I am aware of this particular problem; I guess we would call it a trade measure or action. In fact, I welcome the conversation with whoever will be my new Kenyan counterpart on this. I think there are clear trade discipline concerns from a strict World Trade Organization legal perspective. But I will be very interested to hear Kenya’s perspective and EAC’s perspective on what they are about to achieve.
Kenya, which has welcomed the idea of a comprehensive free trade agreement with the United States, has yet to finalize discussions on the trade deal, Tai revealed that the Washington administration still prefers a bilateral trade agreement with Nairobi.
In June this year, the Joe Biden administration launched the US-Kenya Strategic Trade and Investment Partnership (STIP), replacing earlier negotiations for a trade pact started by the Trump administration.
The new partnership is expected to lead to “high-level engagements across a wide range of areas with a view to increasing investment”, according to a joint statement shared by Tai and her Kenyan counterpart Betty Maina.
Kenya enjoys substantial duty-free access to the US market through the Africa Growth and Opportunity Act (Agoa), but the pact expires in September 2025.
Kenya’s trade with the United States is booming, as data indicates that the United States is now the largest buyer of Kenyan products, surpassing Uganda.