Kenya’s Textile Sector on the Brink as U.S. Trade Pact Nears Expiry

By iNewsAfrica | East Africa Bureau | May 22, 2025

In Summary:
Kenya’s apparel industry faces a major crisis as the U.S. duty-free trade deal under the African Growth and Opportunity Act (AGOA) is set to expire in September 2025. Over 150,000 jobs and hundreds of millions in export value are at stake, with no clear path to renewal.

 In Brief:

• AGOA, key to Kenya’s U.S. exports, expires in September 2025.

• 150,000 jobs and $510 million in apparel exports are threatened.

• Uncertainty compounded by rising tariffs and stalled bilateral trade talks.

NAIROBI, May 22 (iNewsAfrica) —
Kenya’s thriving textile industry is staring down an economic cliff as the expiration date of the African Growth and Opportunity Act (AGOA) approaches. The 25-year-old trade pact, which allows duty-free access to U.S. markets, has been a lifeline for Kenya’s garment manufacturers, especially in export processing zones (EPZs) around Nairobi.

One of the country’s largest garment exporters, United Aryan Ltd., produces millions of jeans annually for major U.S. brands. “Without AGOA, our competitiveness collapses overnight,” warned CEO Pankaj Bedi. “We cannot absorb new tariffs and still remain profitable.”

AGOA has supported more than 150,000 direct and indirect jobs in Kenya’s textile and apparel sector. In 2023 alone, exports to the U.S. under AGOA reached $510 million. But with the program set to expire and negotiations for a bilateral trade deal stalled, the country’s export-dependent manufacturers face a bleak future.

Worsening the outlook, the Trump administration recently introduced a 10% tariff on Kenyan apparel—part of a broader protectionist shift that undermines trade incentives.

Kenya’s Trade Minister Lee Kinyanjui has expressed optimism, claiming Kenya is positioning itself as Africa’s preferred U.S. sourcing destination. But economists warn that high local production costs, coupled with a slowing global economy, may neutralize any advantages.

Talks on a Kenya-U.S. bilateral trade agreement began in 2020 but have made limited progress. With time running out, Kenyan stakeholders are urging Washington and Nairobi to accelerate negotiations and prevent a collapse in one of Africa’s most vibrant export sectors.

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