The African Growth and Opportunity Act (AGOA), enacted by the United States Congress in 2000, has played a pivotal role in shaping Kenya’s textile and apparel industry over the last 25 years. Kenya transformed from a culturally rich but regionally confined textile hub into a competitive global player, largely due to AGOA’s duty-free and quota-free access to the U.S. market. This trade preference triggered a surge in exports, foreign direct investment, and employment opportunities, especially for women and youth in Kenya.
Between 2023 and 2024, employment in AGOA-accredited textile firms in Kenya grew by over 15%, reaching roughly 66,800 workers, up from 58,000 the year before, according to Kenya’s National Bureau of Statistics. Kenyan firms expanded exports significantly, with the United States accounting for more than 85% of their textile and apparel shipments. This growth reduced Kenya’s reliance on Chinese manufacturing networks, helping diversify global sourcing and introducing competitive, high-quality Kenyan products into American supply chains.
For American firms and consumers, AGOA has provided access to efficient, competitively priced Kenyan apparel, supporting jobs in sourcing, logistics, wholesale, and retail sectors. The relationship contributed to a more diversified import base and enhanced supply chain resilience by reducing dependence on China. However, with AGOA’s expiration in late 2025 and uncertainty over its renewal, Kenya’s sector faces significant risks, threatening jobs both locally and in the U.S. supply chain.
In the lead-up to AGOA’s expiration on September 30, 2025, the current U.S. administration introduced important trade policy changes. Despite bipartisan support in Congress for renewal, competing priorities and stricter eligibility requirements prevented reauthorization. The administration also imposed tariffs broadly on many countries, including those previously benefiting under AGOA. Consequently, Kenya and other sub-Saharan African nations lost duty-free access and now face combined tariffs estimated between 23% and 27% on textile and apparel exports to the U.S. This reflects a broader shift in U.S.-Africa trade relations toward a “trade not aid” framework, raising concerns about economic challenges for African exporters and geopolitical realignments.
Several trade studies highlight the risks facing Kenya’s textile exports after losing AGOA preferences. Annual export revenues of $450-500 million and up to 66,000 jobs in the sector risk significant declines. Vulnerable groups such as women and youth are especially at stake.
While proposals exist for multilateral trade partnerships or diversification strategies, little research focuses on actionable bilateral trade options that create mutual benefits for Kenya and the U.S. There is need to answer three fundamental questions:
Answering these questions is crucial to capture the broader implications for allied nations and to reduce supply chain uncertainties affecting firms. We present below a brief analysis to answer these key questions and propose policy recommendations.
Kenya’s textile and apparel industry has grown robustly due to AGOA advantages. In 2024, apparel exports to the U.S. stood at approximately $470 million, a 31% increase over 2023. The U.S. absorbed about 87.5% of Kenya’s textile and apparel exports in early 2025. Kenya is the leading apparel exporter under AGOA in East Africa.
Employment rose to 66,800 workers in 2024, a 15% increase from the previous year, with women and youth forming a large share of this workforce. The sector links upstream to cotton production and downstream into distribution, creating strong economic multipliers.
In the U.S., tens of thousands of jobs in sourcing, freight, wholesale, and retail depend on Kenyan apparel imports. The diversity of these imports reduces supply chain risks by lessening reliance on China.
With AGOA’s expiration, Kenya now faces most-favored-nation tariffs combined with an additional U.S. surtax. The effective combined tariff rate ranges between 23% and 27%, comprising a base rate near 10% plus an extra 13-17% surtax imposed on perceived trade imbalances.
This steep tariff increase is expected to reduce Kenyan apparel exports by 25-30%, worth $110 million to $135 million in lost revenues, and cause job losses of 20,000 to 25,000 people, mostly affecting vulnerable groups. U.S. importers and wholesalers will face higher costs, possibly leading to a loss of up to 5,000 sourcing and retail jobs.
American consumers could experience a 7-10% price increase during a nine-month transition as production shifts, which reduces consumer welfare and product variety, especially for low-income households.
Production is expected to move to countries such as Bangladesh, Sri Lanka, and other nations within China’s economic sphere, which benefit from existing infrastructure and favorable trade deals. This development may strengthen geopolitical competitors and weaken U.S. alliances.
Answering the Research Questions
Policy Recommendations