Kenya & U.S. Trade Agreement Uncertainty

Kenya is facing concerns over the potential expiration of its duty-free trade agreement with the U.S. under the African Growth and Opportunity Act (AGOA). This agreement, which has been in place for 25 years, allows Kenyan exports—such as textiles, agricultural products, and handicrafts—to enter the U.S. market without tariffs. However, if AGOA is not renewed, Kenyan goods will face higher tariffs, making them less competitive and potentially leading to job losses for thousands of workers.

The uncertainty surrounding AGOA has sparked economic and political discussions in Kenya. Manufacturers, including those producing Levi’s and Wrangler jeans, are particularly worried about the impact on their businesses. The factory at United Aryan export processing zone, which employs 16,000 workers, relies heavily on AGOA to maintain its exports to the U.S. Without the agreement, the factory’s founder, Pankaj Bedi, warns that the business may not survive.

Kenya’s government has not commented on the situation, but economists suggest that ending AGOA could strain diplomatic ties between Kenya and the U.S. South African President Cyril Ramaphosa has also raised concerns, stating that AGOA is a priority discussion in U.S.-Africa relations.

China Expands Influence in Latin America

China is making major economic moves in Latin America, further challenging U.S. influence in the region. At the China-Community of Latin American and Caribbean States (CELAC) forum, President Xi Jinping announced a $9.2 billion credit line to support infrastructure, clean energy, artificial intelligence, and digital connectivity across Latin America.

Additionally, China has unveiled a three-year plan covering over 100 joint projects in trade, education, health, and food security. To strengthen economic ties, China is also waiving visa requirements for citizens of Brazil, Argentina, Chile, Peru, and Uruguay.

China has been South America’s largest trading partner since 2020, surpassing the U.S. Trade between China and Latin America reached $500 billion last year and is projected to grow to $750 billion by 2035. Experts believe China’s strategy is focused on securing long-term access to natural resources, markets, and advanced technologies. The country is particularly interested in oil, copper, lithium, and food supplies.

Trump’s Tariff Negotiations

U.S. President Donald Trump has introduced reciprocal tariffs, which have created uncertainty in global trade. These tariffs, announced on April 2, 2025, have led to negotiations between the U.S. and several countries, with some agreements resulting in tariff reductions.

For example, recent talks between the U.S. and China in Geneva led to a 115 percentage point reduction in tariffs for 90 days, lowering them to 30% and 10%, respectively. The next 90 days will determine whether a comprehensive trade deal can be reached to prevent further economic decoupling between the two nations.

Similarly, the U.S. is negotiating with India, which has proposed zero reciprocal tariffs on steel, automobile parts, and pharmaceuticals. India had previously unilaterally reduced tariffs on whiskey and motorcycles, signaling a willingness to cooperate.

EU’s Trade Proposal to the U.S.

The European Union (EU) has presented a new trade proposal to the U.S. in an effort to revive stalled negotiations. The proposal includes phased tariff cuts on non-sensitive goods, as well as cooperation in energy, artificial intelligence, and digital infrastructure.

However, the EU is also preparing $108 billion in retaliatory tariffs if negotiations fail. To sweeten the deal, EU officials are offering to extend a 2020 tariff-free arrangement on U.S. lobster imports, which has helped boost U.S. exports to the EU.

Meanwhile, tensions between the U.S. and China remain high. Although both countries recently agreed to pause steep tariffs, China’s Commerce Ministry has warned that it will take legal action against any organization or individual assisting the U.S. in discouraging the use of China’s advanced semiconductors.