Kenya could face tighter scrutiny and possible loss of access to the U.S. market over allegations that Chinese goods are being rerouted through the country to evade American tariffs.
A White House report released Thursday, August 13, placed Kenya in Tier 3 of what it calls the “Shadow Transshipment Network,” describing it as a “small, opportunistic Chinese target” and an emerging “African Peripheral Hub” for China-linked trade.
The report said Kenya’s strategic ports, bonded warehouses, free-zone regulations, low-cost labour and niche assembly capacity could make it attractive to China-linked exporters seeking to reroute goods before sending them to the United States.
“China-linked exporters gravitate to them because each offers a specialised comparative advantage,” the report said, citing factors including cheap labour and preferential access to the U.S. market.
It warned that Chinese products could be relabelled, repackaged or lightly processed in third countries before being exported to the United States as goods originating elsewhere. The Trump administration has threatened “immediate interdiction, penalty tariffs, sanctions, and potential loss of market access” against countries involved in tariff evasion.
Kenya and Morocco are the only African countries identified on the report’s functional map. It also said a new U.S. agency, the U.S. Detective Border, will use artificial intelligence, satellite imagery and trade analysis to identify suspicious supply chains and assess whether exporters have the capacity to produce the goods they claim originate from their countries.
The allegations could have significant implications for legitimate Kenyan manufacturers, exporters and logistics operators, particularly because Kenya benefits from duty-free access to the U.S. market under the African Growth and Opportunity Act, or AGOA. The report warned that participation in transshipment could expose legitimate exporters to greater scrutiny and put their market access at risk.
Kenya earns approximately Ksh71 billion annually from exports to the United States under AGOA, making continued access to the American market economically important for its exporters.
The report warned that transshipment could become “smuggling disguised as trade” and “fraud cloaked in paperwork,” raising concerns for Kenyan manufacturers, exporters and logistics operators.
