Kenya-US Trade After AGOA: Navigating STIP

For most of its life the African Growth and Opportunity Act (AGOA) was a fixed point in Kenya-US trade. It took effect in 2000 and was last renewed in 2015 for ten years. That stability ended on 30 September 2025, when the authorisation expired with no renewal in place.

Since then Kenyan exporters have lived through a lapse of about four months, two reauthorisations, a Supreme Court ruling that the President cannot impose tariffs under emergency powers, a temporary replacement surcharge that has now expired, and the opening of a new bilateral negotiating track. Anyone still planning around a 2023 picture of how AGOA works is planning around something that no longer exists.

This guide sets out what is true as at 24 October 2026: AGOA’s legal status, what STIP was and what has replaced it, which tariffs Kenyan goods face on entry into the United States, and what a prudent exporter or investor should do about it.

Four dates carry the rest of this guide.

The February 2026 reauthorisation

Section 5019 did two things. It moved the expiry date to 31 December 2026, and it allowed any entry of an AGOA-eligible article made between 30 September 2025 and 3 February 2026 to be liquidated or reliquidated as if it had entered on the date of enactment, that is, duty-free. The refund was not automatic. The importer had to file a request with CBP within 180 days, and CBP must pay within 90 days of reliquidation, without interest. Only goods from countries designated as AGOA beneficiaries on 2 February 2026 qualified; Kenya was one.

The September 2026 extension

H.R. 6500 began as the AGOA Extension Act, which passed the House on 12 January 2026 by 340 votes to 54. The Senate later used it as the vehicle for a continuing appropriations package, passing it on 8 August 2026 by 90 votes to 6; the House agreed on 1 September by 370 to 48, and the President signed it on 2 September 2026. Section 2008 changed every relevant “2026” in the statute to “2028”. Kenya’s Ministry of Investments, Trade and Industry welcomed the extension and, as reported, said the textile and apparel sector supports more than 66,000 direct jobs.

The Strategic Trade and Investment Partnership (STIP) was never a free trade agreement, and it never gave Kenyan goods any tariff preference. Duty-free access to the United States has always run through AGOA.

What STIP was

USTR and Kenya’s then Ministry of Industrialization, Trade and Enterprise Development launched STIP on 14 July 2022. It was a framework for negotiating “high-standard commitments” in areas AGOA does not reach: agriculture and sanitary measures, anti-corruption, digital trade, environment and climate, good regulatory practice, small businesses, workers’ rights, inclusion, standards, and customs and trade facilitation. Negotiating rounds followed, including one in Nairobi in April 2023 and one in Washington in October 2023.

The newer track: an agreement on reciprocal trade

USTR’s 2026 Trade Policy Agenda records that in December 2025 the US Trade Representative met President Ruto to discuss “the negotiation of an agreement on reciprocal trade”. It does not mention STIP. A first round of talks on a framework for that agreement took place in Washington over three days in late February 2026. Kenya’s delegation was led by the Principal Secretary for Trade, Regina Ombam, and the US team by Osvaldo Gómez-Martínez, acting Assistant US Trade Representative for Africa. As reported, the agenda covered goods and tariffs, non-tariff barriers, agricultural trade, services, digital trade, intellectual property, investment, economic security and commercial cooperation, a wider scope than STIP.

AGOA status has never been the whole landed-cost story. From April 2025 a separate tariff layer sat on top of it, and that layer has changed four times.

The reciprocal tariff and the Supreme Court

Executive Order 14257 of 2 April 2025 imposed a reciprocal tariff under the International Emergency Economic Powers Act (IEEPA), starting at a 10% baseline from 5 April 2025. Kenya was at the baseline rate. AGOA did not exempt goods from it: the two operated as separate layers. On 20 February 2026 the Supreme Court held in Learning Resources, Inc. v. Trump (No. 24-1287) that IEEPA does not authorise the President to impose tariffs. The same day, Executive Order 14389 ended the IEEPA duties, including the reciprocal tariff.

The Section 122 surcharge

Also on 20 February 2026, Proclamation 11012 imposed a temporary 10% import surcharge under section 122 of the Trade Act of 1974, effective 24 February 2026. Section 122 allows such a surcharge for no more than 150 days unless Congress extends it. The proclamation exempted listed products (among them certain agricultural goods, pharmaceuticals, energy and goods already under section 232 tariffs) and qualifying USMCA and CAFTA-DR goods, but not AGOA goods. Congress did not extend it, and it ended at 12:01 a.m. on 24 July 2026.

On 7 May 2026 the Court of International Trade held the surcharge invalid in State of Oregon v. United States, but granted relief only to three plaintiffs. The Federal Circuit stayed that judgment on 11 June 2026, and the government’s appeal (No. 26-1804) is pending. Because the surcharge has expired, the appeal now matters mainly for whether duties paid between February and July 2026 can be recovered.

The Section 301 forced labour action

From 24 July 2026 USTR imposed Section 301 tariffs of 10% or 12.5% on goods of 60 economies found to lack an effective ban on imports made with forced labour. Kenya is not on the list. The sub-Saharan economies on it are Angola, Nigeria and South Africa.

AGOA’s value in Kenya is concentrated in one sector, and that is where the last eighteen months have bitten hardest.

Apparel and textiles

Kenya’s Export Processing Zones built a cut-make-trim garment industry on AGOA’s duty-free access and its third-country fabric rule (Chapter VI). The government puts direct employment in the sector at more than 66,000. The reason the sector is so exposed is the size of the ordinary US duty it avoids: many apparel lines carry double-digit rates, such as 16.5% on some cotton knitwear and 32% on some man-made fibre knitwear under the US tariff schedule. Losing AGOA, even for four months, moves those goods from duty-free to those rates.

Agriculture and other goods

Kenya’s largest agricultural exports, such as cut flowers, vegetables and fruit, go mainly to Europe, so this segment was less exposed to the AGOA lapse. In welcoming the 2028 extension, Kenya’s trade ministry named value-added agricultural products, leather and leather products, pharmaceuticals and other manufactured goods as areas for growth in US-bound exports. Pharmaceutical exporters should check the April 2026 section 232 measure before planning on that basis.

The rules of origin have not changed much. What has changed is that they now sit beside a less stable question: whether any overlay tariff applies at all.

General goods

To qualify for AGOA duty-free treatment, a product must be on an AGOA-eligible tariff line and must be wholly obtained in a beneficiary country or meet a 35% value test: materials produced in, and direct processing costs incurred in, the beneficiary country must make up at least 35% of the appraised value. Under 19 U.S.C. 2466a(b)(2), materials and processing in other beneficiary countries count towards the 35%, and US-made materials can count for up to 15% of the appraised value. Eligibility is line by line, so the HS classification matters.

Apparel

Apparel has its own regime under section 112 of AGOA (19 U.S.C. 3721). The third-country fabric rule lets a lesser developed beneficiary country, which includes Kenya, assemble garments from fabric made anywhere and still export them duty-free. That rule is what makes Kenya’s cut-make-trim model work without a large domestic textile industry. It is subject to an annual cap: regional and third-country fabric apparel together may not exceed 7% of all US apparel imports by square metre equivalent, and the third-country fabric share may not exceed 3.5%. The current limits took effect on 1 October 2026.

Being an AGOA beneficiary is not a permanent entitlement. Under section 506A of the Trade Act of 1974, the President must review each country every year against the criteria in section 104 of AGOA and must terminate a country that no longer meets them. The criteria include a market-based economy, the rule of law, political pluralism, due process, removing barriers to US trade and investment, policies to reduce poverty, a system to combat corruption and bribery, and protection of worker rights, and a country must not engage in gross violations of human rights.

USTR opened the 26th annual review, covering eligibility for 2027, by a Federal Register notice of 30 June 2026, with a public hearing on 23 July 2026. For 2026, 33 sub-Saharan countries were designated, Kenya among them, and 16 were not. Removal is a real outcome: Ethiopia, Guinea and Mali lost their designation from 1 January 2022, and Uganda is among those not designated for 2026.

“Modernising” AGOA

On 29 April 2026 USTR asked for public comments on modernising AGOA. The notice says USTR will recommend reforms to Congress so that the programme serves US workers and businesses, advances US security goals, “optimizes balanced bilateral trade flows” and provides “a path for reciprocal trade agreements” with more advanced beneficiaries as they graduate. It names Kenya, with South Africa and Nigeria, as one of the few countries that supply most US imports under AGOA. The September 2026 extension did not adopt any reforms, so the shape of AGOA after 2028 is open.

Kenyan government statements, industry bodies and independent analysis point the same way: use the current AGOA window to build other markets, not to put diversification off again.

EU preferences turn on EU rules of origin, which for now are those of the EU Market Access Regulation pending a new protocol, so origin work done for AGOA does not carry over automatically. Continental trade under the AfCFTA still depends on partner states applying their schedules and on non-tariff barriers coming down.

The settled picture most exporters planned around before September 2025, against the position at 24 October 2026.

In short: AGOA is in force to 31 December 2028, Kenya is a designated beneficiary, and AGOA-eligible Kenyan goods currently enter without the overlays that applied for much of 2025 and 2026. Every part of that sentence has changed at least once since September 2025, and two parts, Kenya’s eligibility for 2027 and the Section 122 refund appeal, are still open. Neither STIP nor the reciprocal trade talks has produced a binding text. The advice that held throughout is simple: know what your product qualifies for today, keep the documents current, and build markets outside the United States in parallel.

What a Kenyan exporter or US-facing investor should confirm now.

1. Reconfirm AGOA eligibility line by line

   Check each eight-digit tariff line against the current US tariff schedule rather than relying on an earlier confirmation.

2. Check what happened to lapse-period refunds

   Requests for duties paid on AGOA goods entered between 30 September 2025 and 3 February 2026 had to reach CBP by 2 August 2026. Ask your US importer whether they were filed and who receives the money under your contract.

3. Ask about overlay tariff refunds

   If your buyer paid the IEEPA reciprocal tariff or the Section 122 surcharge on your goods, find out whether it is claiming a refund and whether your contract shares it.

4. Keep origin documents in order

   For apparel, the AGOA textile certificate of origin and the KRA export visa; for other goods, a record showing the 35% value test is met.

5. Confirm the overlay position before quoting a landed cost

   Check with the customs broker whether any section 232, Section 301 or new measure covers the shipment at the date of entry.

6. Track the 2027 eligibility decision

   Watch for the year-end proclamation on beneficiary countries and have a plan for an adverse result.

7. Keep STIP and the reciprocal trade talks apart

   Neither has produced binding text. Do not build a business plan on either concluding by a particular date.

8. Build EU, UK and AfCFTA buyers now

   Use the window to 2028 to diversify while US access is open.

9. Stress-test long-term US supply contracts

   Before signing multi-year contracts priced on AGOA duty-free terms, model a repeat of the 2025 lapse and make sure the contract says who bears new duties.

10. Take advice before major US-facing investments

    Given the pace of change, an AGOA-dependent investment case needs a current legal review, not a reference to how the programme worked two years ago.

Primary sources first. Press, industry and law firm material is marked as such and used only where no primary text was available.

1. Consolidated Appropriations Act, 2026 (H.R. 7148, Public Law 119-75), Division I, section 5019Primary
2. Continuing Appropriations and Extensions Act, 2027 (H.R. 6500, Public Law 119-103), Division B, section 2008Primary
3. Congress.gov, H.R. 6500 all actions (votes and signature)Primary
4. Supreme Court of the United States, Learning Resources, Inc. v. Trump, No. 24-1287 (20 February 2026)Primary
5. Executive Order 14257, reciprocal tariff (90 FR 15041)Primary
6. Proclamation 11012, Section 122 temporary import surcharge (91 FR 9339)Primary
7. Executive Order 14389, Ending Certain Tariff Actions (91 FR 9437)Primary
8. USTR, Notice of actions in Section 301 forced labour investigations of 60 economies (91 FR 47318)Primary
9. Proclamation on section 232 tariffs on pharmaceuticals (91 FR 18183)Primary
10. USTR, annual review of AGOA country eligibility for 2027 (91 FR 39653, 30 June 2026)Primary
11. USTR, request for comments on the modernization of AGOA (91 FR 23142, 29 April 2026)Primary
12. CITA, limitations on duty-free AGOA apparel from regional and third-country fabric (91 FR 59114)Primary
13. CBP, AGOA textile certificate of origin information collection (May 2026)Primary
14. Proclamation 10326, termination of Ethiopia, Guinea and Mali (86 FR 73593)Primary
15. 19 U.S.C. 2466a (section 506A, Trade Act of 1974), AGOA rules of origin and reviewPrimary
16. 19 U.S.C. 3721 (section 112, AGOA), apparel rulesPrimary
17. US International Trade Commission, Harmonized Tariff Schedule (subheadings 6110.20.20 and 6110.30.30)Primary
18. USTR, launch of the US-Kenya STIP (14 July 2022)Primary
19. USTR, second in-person STIP round (October 2023)Primary
20. USTR, 2026 Trade Policy Agenda and 2025 Annual ReportPrimary
21. USTR, agreements on reciprocal tradePrimary
22. USTR, Kenya country page (2025 trade figures)Primary
23. US Census Bureau, trade in goods with KenyaPrimary
24. Kenya Revenue Authority, preferential tariff treatment procedures (AGOA)Primary
25. European Commission, bilateral application of the EU-Kenya agreement from 1 July 2024Primary
26. European Commission, key elements of the EU-Kenya EPAPrimary
27. UK Government, summary of the UK-Kenya EPAPrimary
28. Oregon Department of Justice, Oregon v. Trump litigation tracker (Section 122)Party
29. tralac, African Union statement on Kenya and Ghana depositing AfCFTA ratifications (May 2018)Secondary
30. The Star, Kenya and US hold first round of talks on reciprocal trade framework (27 February 2026)Press
31. The Standard, Kenya welcomes AGOA extension to December 2028 (September 2026)Press
32. The Standard, Kenya faces AGOA test as US reviews governance record (3 July 2026)Press
33. Ward and Smith, Court of International Trade rejects 10% Section 122 tariff (May 2026)Law firm
34. Curtis, Mallet-Prevost, tariff recovery litigation: IEEPA refunds and the Section 122 appeal (8 October 2026)Law firm

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