El Salvador: Trade Partnerships

El Salvador's trade is shaped by a well-developed textile and apparel manufacturing sector that supplies finished garments largely for export, alongside a persistent and substantial trade deficit. As of 2023, the country exported roughly 6.5 billion dollars in goods while importing nearly 15.6 billion dollars, a gap financed in large part by remittances from Salvadorans living abroad rather than by earnings from goods trade itself.

The United States is by far El Salvador's most important trading partner on both sides of the ledger: as of 2023 it purchased close to 29 percent of Salvadoran exports and supplied 36 percent of its imports, reflecting decades of close economic integration reinforced by the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). Within Central America, Guatemala and Honduras also rank among El Salvador's leading trading partners in both directions, a product of the Central American Common Market that eases regional commerce, while China has emerged as a significant supplier of imported goods.

El Salvador's leading exports are dominated by apparel, including T-shirts and other knitted garments produced under preferential access arrangements with the United States, while its imports are led by petroleum products, pharmaceuticals, and industrial machinery. The country's use of the U.S. dollar as its official currency since 2001 simplifies transactions with its largest trading partner but leaves it without an independent monetary tool to cushion the economy against external trade shocks.