Taiwan is deepening its ties with Latin American countries in tandem with the Trump administration’s growing focus on the Western Hemisphere.

For the first time in nearly two decades, Taiwan may have a genuine opportunity to reverse the steady erosion of its diplomatic presence in Latin America. The island democracy is gradually deepening ties across the region as part of a calibrated strategy to reinforce official partnerships and align with the shifting geopolitical priorities of the United States, its principal security partner and largest export market.

Taiwan’s top representative to the United States, Ambassador Alexander Tah-Ray Yui, framed this strategy more directly at a March conference held in Miami by the conservative Heritage Foundation think tank. Yui said it is now a “more positive and hopeful time” for Taiwan to strengthen ties with countries in Central and South America that are reassessing the risks of closer relations with the People’s Republic of China (PRC), according to The Hill.

Since the start of the second Trump administration, Washington has devoted more attention to Latin America than any of its recent predecessors. The administration is determined to reassert American primacy in the region, where the PRC has entrenched itself in recent years through massive infrastructure investments and political outreach.

“This is the Western Hemisphere. This is where we live — and we’re not going to allow the Western Hemisphere to be a base of operation for adversaries, competitors, and rivals of the United States,” Secretary of State Marco Rubio said in January after the U.S. military’s ouster of former Venezuelan president Nicolás Maduro. 

For Taiwan, renewed American interest in Latin America presents an opportunity to stabilize official relations there despite pressure from the PRC, to revisit ties with countries once thought to be firmly in Beijing’s orbit, and to potentially reestablish at least one official diplomatic relationship. The latter step would be pathbreaking: It has not happened for almost 20 years. The last nation to sever ties with Beijing in favor of Taipei was the Caribbean island country of Saint Lucia in 2007.

Far more common has been Taiwan’s loss of Latin American allies to the PRC. Costa Rica derecognized Taipei in 2007, followed by Panama in 2017, the Dominican Republic and El Salvador in 2018, Nicaragua in 2021, and Honduras in 2023.

The Honduras opportunity

Among the Latin American countries that have cut ties with Taiwan in recent years, Honduras stands out as the most plausible candidate to reverse course — offering Taipei a rare chance to reclaim a formal diplomatic partner.

A key reason for Honduras’ stance is that President Nasry “Tito” Asfura is an ally of the U.S. president. Trump endorsed Asfura in his victorious bid for the Honduran presidency against pro-Beijing Xiaomara Castro last December in a heated race. After meeting with Trump at Mar-a-Lago in Florida in February, Asfura said that he was considering reestablishing diplomatic relations with Taiwan, echoing comments he made on his campaign trail last fall.

 “My sense is that a return to Taiwan is realistic, and I’ve had Taiwanese officials suggest as much,” Timothy Rich, a political science professor at Western Kentucky University, tells Taiwan Business TOPICS. “For Taiwan, signaling a shared concern about Chinese influence in Central America should resonate with the Trump administration.”

Analysts note that a revived diplomatic relationship with Honduras would benefit Taiwan, despite the country’s small market and limited opportunities for Taiwanese businesses.

“It’s very important for Taiwan to have official diplomatic partners, because that gives it a degree of much-needed international legitimacy in an international system in which the vast majority of countries don’t recognize its sovereignty,” says Michael Cunningham, a senior fellow at the Stimson Center, a think tank based in Washington, DC.

Just 12 nations currently maintain diplomatic ties with Taiwan, down from more than 20 a decade ago and about 30 when the Cold War ended in late 1991.

 “Honduras is also a ‘safe’ country [in the sense that it is not a major power] that could re-establish ties without triggering a dangerous backlash from Beijing,” Cunningham says.

Moreover, reestablishing diplomatic relations with Honduras would give Taiwan’s president one more destination for an official visit, notes Ross Darrell Feingold, a Taipei-based lawyer and political risk analyst.

“The key here is not only that it allows the president to look ‘presidential’ at home in Taiwan,” he says. “More importantly, it justifies a transit stop in the United States. The more countries the president must visit, the greater the number of trips with U.S. stopovers that Taiwan can lobby the United States to agree to.”

However, Feingold also sees an overture to Honduras as risky. He notes that countries with similar profiles have switched ties back to Taiwan, only to eventually return to an official relationship with the PRC. Beijing often wins in the game of pendulum diplomacy because of its enormous economy and resources. Nicaragua, The Gambia, Liberia, and the Pacific island country of Nauru all eventually settled on official ties with China after long stretches of recognizing Taiwan.

“There is no guarantee that the subsequent president [of Honduras] will maintain diplomatic relations with Taiwan or switch again to China,” Feingold says. “In other words, Taiwan might provide aid in the coming years, some of which might be lost to corruption, only to have nothing to show for it in the future.”

Panama matters again

While Honduras is the Latin American nation most likely to resume formal diplomatic relations with Taiwan, some of its Central American neighbors have indicated interest in strengthening unofficial ties. Chief among them is Panama, which had diplomatic relations with Taiwan for over a century. Since Panama recognized Beijing in 2017, Taiwan has had limited contact with the country, but that began to change in 2025 shortly after the start of the second Trump administration.

In February 2025, Secretary Rubio visited Panama, Costa Rica, El Salvador, Guatemala, and the Dominican Republic, with countering China’s influence in the hemisphere at the top of the agenda.

The most significant immediate outcome of Rubio’s trip was Panama’s announcement that it would exit China’s massive infrastructure project, the Belt and Road Initiative (BRI). A signature project of Chinese leader Xi Jinping, BRI is largely seen in Washington as an attempt by China to dominate developing-country infrastructure — most worryingly, strategic ports — to help export its near-limitless excess manufacturing capacity.

Panama’s withdrawal from BRI — the first by any Latin American nation — cleared the way for a U.S.-led full-court press against the control of Panama Canal ports by the Panama Ports Company (PPC), a subsidiary of Hong Kong-based CK Hutchison. The Panamanian government annulled PPC’s port contracts in February, following a court ruling, handing over interim control of the ports to Danish shipping giant A.P. Moller-Maersk and Switzerland-based Mediterranean Shipping Co.

One reason the United States seeks to prevent PRC control of the Panama Canal is that it would complicate American intervention in the Taiwan Strait. According to the U.S. Army War College, in a cross-Strait war, the United States would use the Panama Canal as a critical logistical shortcut to rapidly shift naval assets and supplies from the Atlantic to the Pacific. The canal allows for faster deployment than navigating around South America, though it cannot accommodate modern supercarriers like the Nimitz and Gerald R. Ford classes.

Chinese companies’ control of ports at both ends of the canal could enable the People’s Liberation Army (PLA) to block or delay U.S. military reinforcements traveling from the Atlantic to the Pacific. If the United States cannot use the Panama Canal, up to 30% of its fleet could be delayed, U.S. Marine Corps Major Sean Harper said in a March 2025 Substack post.

Mending fences

As Panama steps back from its relationship with China, the Central American country is engaging with Taiwan for the first time in almost a decade. In November 2025, a nine-member delegation of Panamanian lawmakers visited Taiwan and met with both Vice President Hsiao Bi-khim and Legislative Speaker Han Kuo-yu. The lawmakers visited Taiwan following an invitation from the Taiwanese government, which covered their lodging, meals, and local transportation, according to the Panamanian newspaper Metro Libre.

Notably, the lawmakers proceeded with the trip despite pressure from Beijing to cancel. In November, the Panamanian newspaper La Prensa reported that Chinese embassy staff in Panama had urged them to “immediately cancel” plans to visit Taiwan. 

However, in what appeared to be a move to mollify Beijing, Panamanian President José Raúl Mulino said before the legislators’ departure that the trip did not have his administration’s approval.

While Mulino has kept his distance from Taiwan, a second delegation of Panamanian lawmakers visited in February. Taiwan’s Ministry of Foreign Affairs said in a statement that the visit was intended to inform the lawmakers about Taiwan’s democratic society as well as its prowess in semiconductors and advanced technology hardware more broadly.

“The damage to the China brand globally over numerous issues, and Taiwan’s positive image, could be an impetus for the recent delegations to Taiwan from Panama’s National Assembly,” Feingold says. “Certainly, some politicians in Panama will remember Taiwan’s past aid and friendship, and some were always skeptical of China, or became so after nine years of diplomatic relations, just like parliamentarians elsewhere are.”

Still, analysts say there are limits to how far Panama is willing to go in deepening its relationship with Taiwan. “I have a harder time seeing Panama switch back unless there is significant U.S. pressure coupled with economic incentives,” Western Kentucky State’s Rich says.

Cautious optimism

In addition to the favorable geopolitical factors for Taiwan’s engagement with Latin American countries, a strong economic rationale remains for boosting unofficial ties. For instance, Taiwan is Panama’s second-largest export market after the United States, with demand for Panamanian shrimp especially strong. Taiwan also has significant capital it can deploy overseas in high-quality investment projects.

At the same time, China’s vast market has not translated into meaningful gains for Panama. Establishing diplomatic ties with Beijing has fallen short of the economic windfall many had anticipated. Instead, China has largely imported Panamanian copper and relatively few local jobs have been generated, despite the ambitious promises made a decade ago.

Costa Rica, too, has been disappointed by the results of closer ties with China. After nearly two decades of diplomatic relations, San José faces a wide trade imbalance with Beijing and a string of failed infrastructure projects. Chinese investment in Costa Rica has been limited. Over the past 20 years, it has averaged less than US$3 million annually, according to Costa Rica’s Ministry of Foreign Trade.

“They are extremely modest figures,” Minister Manuel Tovar said in a February interview with DIVERGENTES, a Central American media platform.

In May 2025, Costa Rica sent five officials from its Directorate of Intelligence and Security to Taiwan for a 23-day national security training program, the first such exchange since the two severed ties in 2007. Funded entirely by Taiwan, the training focused on intelligence gathering and security.

Even as Taiwan makes modest headway with Panama and Costa Rica, it must contend with Beijing’s efforts to peel away its three remaining diplomatic allies in Latin America: Guatemala, Paraguay, and Belize. A March report by Reuters noted that at least 19 Paraguayan lawmakers and five journalists have visited China since late 2023, with Beijing typically covering the costs.

Auguring well for Taiwan is that Paraguayan President Santiago Peña is a strong supporter of the bilateral relationship. He also seems keenly aware of the risks of taking Beijing’s promises of lavish aid and investment at face value. “All the Latin American ​countries that switched from Taiwan to China and fell into the arms of the promise of the Chinese dream — every single one of them is worse off than Paraguay,” he said in December on his podcast.

Still, economic factors will remain paramount to Taiwan’s prospects in Latin America. Analysts say that Taiwan’s best bet for making inroads in the region — and resisting PRC pressure — is to aid in addressing the pressing economic needs of Central and South American states.

“Countries in Latin America are turning to China for economic opportunity and much-needed investment that, unfortunately, no one else is providing,” says the Stimson Center’s Cunningham. “This is the root of Washington’s and Taipei’s problems in the region. Changing this dynamic requires more economic engagement in Latin America from the U.S., Taiwan, and their partners.”