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China and Kenya Navigate the Global Trade War

Last week, President William Ruto made a state visit to China that saw the two governments sign a flurry of deals, including development projects, investment promotions, and investment agreements worth US $1.06bn.

• Kenya-China relations said they upgraded ties to a “Comprehensive Strategic Partnership in the New Era.”

• The visit came in the backdrop of a new global trade war triggered by new protectionist tariffs by US President Donald Trump.

• It also coincided with a postponent of a planned visit by US Secretary of State Marco Rubio to Kenya and Ethiopia, although the news carried the hint that President Ruto may be invited to Washington soon.

“Both sides reaffirmed their commitment to aligning the Belt and Road Initiative (BRI) with Kenya’s national development agenda,” State House said in a statement.

In an address at Peking University, President Ruto called for reforms to Bretton Woods institutions, and said the current tariff war “may be the death blow” of the post-World War 2 system.

The visit likely places Kenya in Washington’s crosshairs, as both the US and China have tried to use their economic and political muscle to pull allies globally and neutralise competitors in the ongoing trade dispute. China is Kenya’s biggest source of imports, but Kenya and the US have a long-running partnership that transcends several facets, including security.

As Washington moves to close individual deals with other countries in coming weeks, it is likely to revive the free trade agreement proposed during Trump’s first term, or a version of it. Whether it works or not depends on the details, and whether short-term strategic interests triumph over long-term ones.

Stay updated on this and other important news on The Kenyan Wall Street.

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