OPINION:
Most Americans cannot find Paraguay — a country of close to 7 million and surrounded by Bolivia, Brazil and Argentina — on a map.
Smaller than California, landlocked in the heart of South America and with no coastline or oil, Paraguay nonetheless sits at the center of one of the most consequential geopolitical contests of our time: the struggle between the United States and China for dominance in the Western Hemisphere.
Forty years ago, Paraguay was under a military dictatorship led by Gen. Alfredo Stroessner. Twenty years ago, it was a fragile democracy plagued by corruption and underdevelopment. Ten years ago, it had become politically stable but remained economically unremarkable, little more than a footnote in regional trade agreements.
Today, thanks to an overhaul of its fiscal architecture and maintaining budgetary discipline, the country — which had robust 6% growth in gross domestic product last year — features a double investment-grade credit rating, one of the lowest flat tax rates in the hemisphere, 100% renewable electricity from two of the world’s largest hydroelectric dams and an enormous, under-construction artificial intelligence data center to be powered entirely by clean energy.
No less than Javier Milei, the dynamic president of Argentina who rescued his country from more than 75 years of economic malaise, has offered effusive praise to his northeastern neighbor. Speaking before the full Paraguayan legislature late last year, Mr. Milei proclaimed, “In recent decades, Paraguay diligently embraced the ideas of economic freedom — and as a result, inflation is a thing of the past and the country has not stopped growing for over 20 years. Paraguay attracts investors and residents from around the world. Evidently, they are doing something right.”
This transformation stands in stark contrast with other regional neighbors that have sidled up to China.
In a systematic diplomatic offensive, China has flipped 10 Latin American and Caribbean nations away from Taiwan recognition since 2016. Since the turn of the century, Beijing has signed nearly 1,000 bilateral agreements with countries in the region and financed roughly 2,500 development projects.
China’s expansion isn’t purely commercial. Beijing has satellite ground stations in Argentina, Bolivia, Brazil, Chile and Venezuela. The U.S. military has flagged these facilities as potential intelligence-gathering platforms. Huawei and ZTE, both sanctioned by the U.S., have embedded themselves in many countries’ 5G networks.
However, Asuncion has held firm, and Paraguay is one of only four Latin American nations that still formally recognize Taipei. It’s also one of the precious few that haven’t allowed Chinese state firms to embed themselves in its critical infrastructure.
Supporting Paraguay is neither a Republican nor a Democratic position; it is an American one. Whether the priority is countering Chinese influence, defending democratic institutions in the region or securing supply chains and energy-critical infrastructure for U.S. industry, Paraguay checks every box.
The case for a deeper bilateral partnership has been consistent across American administrations, and it is only becoming stronger as China continues to look for openings in the hemisphere.
The Trump administration has given this agenda new urgency. Secretary of State Marco Rubio’s regional tour last year reflects a clear strategic doctrine: reinforcing America-aligned governments before Beijing’s economic leverage converts them into geopolitical clients.
Paraguay represents the opposite scenario: a country that has never allowed that foothold to develop in the first place.
Paraguay was represented at the inaugural Shield of the Americas summit this month at the Trump National in Doral, Florida, at which a multinational alliance to combat organized crime, narco-terrorist cartels, illegal migration and foreign influence was formalized.
Mere days later, the Paraguayan government enacted a status of forces agreement, which established a legal framework for the presence of U.S. security forces in Paraguay for training, joint exercises and humanitarian assistance.
Deputy Secretary of State Christopher Landau said of the relationship, “I honestly believe it has never been better.”
The entire “America First” framework aligns naturally with Paraguay’s model: a 10% flat corporate tax, free capital repatriation, no Chinese infrastructure foothold, formal recognition of Taiwan and an open pipeline for American engineering contracts on a 2,050-mile, commercially vital waterway.
These are precisely the win-win opportunities Washington says it seeks from allies.
Successive U.S. administrations have championed multilateral investment frameworks, democratic governance and supply chain diversification — all of which Paraguay satisfies. The U.S. International Development Finance Corp., U.S. Export-Import Bank and Inter-American Development Bank all have instruments aligned with Paraguay’s development trajectory.
American firms in dredging, construction, energy, agribusiness and technology are beginning to establish themselves in the country before European and Chinese competitors consolidate their positions.
The broader argument isn’t overly complicated. As China systematically converts economic relationships into geopolitical leverage — flipping Taiwan allies, building dual-use ports and deploying surveillance-capable infrastructure — Washington appreciates additional anchor allies that aren’t for sale.
Asuncion has demonstrated in recent years and through multiple democratic transitions it is exactly that. Maintaining and deepening the bilateral ties is strategic self-interest, not charity.
When the rules in other markets dissolve, Paraguay offers certainty. As 2026 progresses, certainty is an invaluable commodity in the global investment landscape. The hope is that American business will continue to follow Washington’s lead and take advantage of it.
• Ricardo Daniel Sasiain Sosa is a Paraguayan lawyer, media host and strategic adviser engaged in shaping conversations on law, governance and economic policy.
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