Brazil & Southern Cone - June 2026

Paraguay’s President Santiago Peña shored up ties with Taiwan during a four-day state visit in May, affirming Paraguay as one of the few remaining countries to officially recognise Taiwan as a sovereign state. Despite this continued diplomatic engagement, Peña faces significant domestic pressure as his popularity wanes and critics argue that maintaining ties with Taiwan rather than with the People’s Republic of China sacrifices major economic opportunities.

During the visit to Taiwan from 7-10 May, the Paraguayan delegation signed several cooperation agreements with their Taiwanese counterparts. These included commitments to foster deeper ties in areas such as cybersecurity and artificial intelligence (AI), with one memorandum of understanding for Taiwan to invest in the construction of digital infrastructure in Paraguay, such as a data processing centre for AI. Taiwanese companies such as electronics manufacturer Foxconn also expressed interest in opening subsidiaries in Paraguay.

The rhetoric from Peña and other officials during this Taiwan trip emphasised the opportunities for Paraguay to integrate further into the supply chains of high-tech industries. Taiwan’s President Lai Ching-te also accompanied Peña to an industrial research park in the city of Tainan. According to a Paraguayan government statement, the delegation was seeking to better understand the technology and development models that have helped to position Taiwan as a global leader in computer chip manufacturing and other high-value sectors.

Other agreements covered sectors such as trade and agriculture, with deals that looked to boost bilateral agricultural technology research initiatives, as well as a breakthrough for Paraguayan exports, with Taiwan authorising shipments of poultry. With this approval, the Taiwanese market will now be open to receiving shipments of Paraguay’s three main meat products – beef, pork, and poultry.

China tensions

However, Peña’s latest Taiwan trip has also drawn criticism from the Chinese government in Beijing. On 12 May Chinese foreign ministry spokesperson, Guo Jiakun, accused Paraguay of being a “pawn” of Taiwan’s “separatist” forces. Guo affirmed the People’s Republic of China’s claim over Taiwan and warned that “the wheel of history will not wait for any country, and deviating from the One China principle will only lead to isolation in the international community”.

The spokesperson also highlighted that there is strong support among various economic sectors in Paraguay to deepen relations with China instead of Taiwan, claiming that opinion polls show 90% public support for boosting China ties. “This clearly shows that establishing diplomatic relations with China corresponds to the fundamental long-term interests of the Paraguayan people, while the connivance with Taiwan’s authorities does not enjoy popular backing,” he said.

Paraguay’s ruling Asociación Nacional Republicana-Partido Colorado (ANR-PC) has for decades sided with Taipei over Beijing. This dates back to the 1950s, amid the efforts by Paraguayan military dictator, General Alfredo Stroessner (1954-1989), to shore up ties with global anti-communist figures such as Taiwan’s former nationalist leader Chiang Kai-shek (1948-1975). But Paraguayan opposition parties have in recent years been echoing the calls from the country’s agricultural exporters to try to boost access to the Chinese market, raising pressure on the ANR-PC government.

Philippines visit

After departing Taiwan, President Peña travelled to the Philippines where he met with the country’s right-wing leader and fellow US ally, President Ferdinand Marcos Jr, the son of former Philippine dictator Ferdinand Marcos (1965-1986). Although no major deals were announced by the Paraguayan delegation in Manila, Peña reportedly discussed opportunities to boost trade and cooperation on agriculture.