While America’s attention is focused on Ukraine, Taiwan, and the Middle East, we’re missing a golden opportunity to block China’s influence in our own backyard by strengthening ties with Paraguay – one of the few countries still recognizing Taiwan instead of communist China.
At a Glance
- Paraguay remains one of Taiwan’s few diplomatic allies, resisting China’s aggressive courtship despite economic pressure
- With abundant hydroelectric power, low taxes, and stable government, Paraguay offers unique opportunities for U.S. investment and nearshoring
- The U.S. could strengthen regional security by deepening ties with Paraguay through trade agreements, military support, and educational initiatives
- Paraguay’s new president Santiago Peña has maintained pro-U.S. policies while positioning the country as an emerging economic powerhouse
- China uses economic leverage and vaccine diplomacy to pressure Paraguay into switching diplomatic recognition
America’s Overlooked Ally in South America
While the Biden administration burns through billions supporting foreign countries halfway around the world, we have a staunch ally right in our hemisphere that’s being criminally neglected. Paraguay stands as a rare beacon of pro-American, anti-communist foreign policy in a region increasingly dominated by leftist governments. Think about this – Paraguay is one of only 13 countries worldwide still maintaining diplomatic relations with Taiwan instead of Communist China. That alone should make them a priority partner for American foreign policy.
Paraguay has maintained a fragile democracy for 35 years despite a history marked by war and dictatorship. The country’s economy has shown remarkable stability and growth under President Santiago Peña’s administration, making it a standout in a region plagued by economic turmoil and socialist experimentation. Yet instead of reinforcing this alliance, the Biden administration seems content to let China make inroads through economic pressure and vaccine diplomacy.
— dan linnaeus (@DanLinnaeus) May 17, 2024
The Strategic Value Washington Is Ignoring
Let’s get real about Paraguay’s strategic importance. This isn’t just about being nice to a friendly nation – it’s about American national security and economic interests. Paraguay sits at the heart of South America with abundant natural resources, particularly clean hydroelectric power that could support American tech industries looking for reliable, green energy. The country offers competitive advantages including low taxes, cheap energy, low labor costs, and access to larger regional markets including Brazil and Argentina.
In a world where everyone’s talking about “nearshoring” and securing supply chains away from China, Paraguay practically waves a giant “INVEST HERE” sign that our government seems blind to. The Paraguayan government has streamlined its tax system and improved economic management, earning an investment-grade credit rating. Meanwhile, the Biden administration focuses on funneling billions to Ukraine rather than securing our economic interests in our own hemisphere.
China’s Creeping Influence vs. American Opportunity
While America sleeps at the wheel, China is aggressively courting Paraguay to abandon Taiwan. Beijing has used vaccine diplomacy during the pandemic and economic pressure through its influence on neighboring countries to squeeze Paraguay. The communist regime dangles access to their massive market as bait, suggesting Paraguay could export more soybeans and beef if only they’d cut ties with Taiwan. This is the same playbook China has used successfully with other nations.
Instead of countering with a strong economic partnership, the Biden administration’s most notable action toward Paraguay has been sanctioning former president Horacio Cartes for corruption. While fighting corruption is important, it’s telling that similar actions aren’t taken against countries with identical issues but less friendly policies toward the United States. This diplomatic hypocrisy isn’t lost on Paraguay’s leaders, who continue to support American interests despite getting little in return.
Building a Real Partnership
If America had a competent foreign policy focused on actual American interests, we’d be developing strategic partnerships with Paraguay right now. We could address Paraguay’s human capital deficit by encouraging American universities to establish campuses there. We could negotiate preferential trade agreements and support military modernization. We could help transform Paraguay into a technology hub leveraging its abundant clean energy resources to support data centers and manufacturing facilities.
Paraguay is positioning itself as a candidate for manufacturing sensitive products for U.S. markets and has already initiated discussions with major tech companies regarding energy infrastructure, processor manufacturing, AI projects, and data centers. The country collaborates with Taiwan and South Korea to enhance digital capabilities and cybersecurity – exactly the kind of initiatives we should be supporting instead of sending billions to corrupt governments across the globe with nothing to show for it.
America needs to wake up to the strategic opportunity Paraguay represents before China succeeds in flipping one of Taiwan’s last allies. This isn’t just about Paraguay – it’s about demonstrating that America stands by its friends and recognizes real opportunities to advance our interests and values in our own hemisphere. If we can’t even get our foreign policy right in our own backyard, what hope do we have for the rest of the world?
