Paraguay: Foreign Relations

Paraguay's foreign relations are shaped in large part by its status as the only member of the Mercosur trade bloc, and the only country in South America, that maintains formal diplomatic relations with Taiwan rather than the People's Republic of China. That relationship dates back decades and has been reinforced through cooperation on agriculture, technology, and security.

As of 2026, Paraguayan officials, led by President Santiago Pena and Foreign Minister Ruben Ramirez Lezcano, have said the country is open to expanding commercial ties with mainland China without severing relations with Taiwan, a position that has drawn interest from trading partners within Mercosur, including Brazil, as the bloc pursues broader trade agreements with the European Union and Japan.

The United States remains an important, if comparatively modest, trading partner, accounting for roughly five percent of Paraguay's trade as of 2026, while Taiwan has sought to deepen ties through technology cooperation, including agreements on artificial intelligence, cybersecurity, and judicial cooperation. Paraguay is a founding member of Mercosur and belongs to the United Nations and the Organization of American States, positioning it as a focal point in the broader competition between Washington, Beijing, and Taipei for influence in South America.