Honduras’ 2023 switch in diplomatic recognition cost its shrimp exporters access to Taiwan, triggering a sharp fall in sales, the closure of dozens of firms and the loss of thousands of jobs.
Honduras: diplomatic pivot meets domestic pushback
Honduras’s move in 2023 to recognise Beijing rather than Taipei was widely read as a victory for Chinese influence in the region. In practice, the outcome has been mixed. The diplomatic switch closed off one of the most important markets for Honduran shrimp exporters, producing a sharp decline in sales, the failure of dozens of companies and thousands of job losses. Economic pain at home has translated into political heat: in May the Honduran congress approved investigations into Chinese business activities and a reassessment of bilateral agreements. Huawei-linked projects have come under growing scrutiny, and alternative suppliers such as Cisco Systems have entered public discussion.
President Nasry Asfura has publicly raised the possibility of restoring relations with Taipei, even as his government maintains ties with Beijing, underscoring how the political calculus that produced the initial switch is now being reevaluated in light of concrete economic consequences.
Panama: joining and then exiting the Belt and Road
Panama’s relationship with China followed a similar pattern of engagement and correction. In 2017, Panama switched recognition from Taiwan and later became the first Latin American country to join China’s Belt and Road Initiative. Yet Panama left the initiative in early 2025 under pressure from the United States. The country continues to trade with China while strengthening ties with the United States, choosing to preserve room to manoeuvre between both capitals rather than lining up exclusively with one.
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See what we buildNicaragua: asset reversals and migration policy
Nicaragua has kept close relations with Beijing, but Beijing ties did not prevent the Managua government from reversing a high-profile asset transfer: the Ortega government will return BHMB Mining to its original owners after the company had been confiscated and transferred to Chinese firms at the end of 2025. Nicaragua also ended a visa-free program for Cuban citizens that Washington had viewed as contributing to migration flows toward the United States. These moves did not break ties with China; they show how governments can accommodate US concerns while remaining close partners of Beijing.
Venezuela and Cuba: strategic breadth despite deep Chinese links
China spent many years building one of its closest relationships in the Western Hemisphere with Venezuela. Even so, political developments in Caracas—specifically the removal of former president Nicolas Maduro and his replacement by a more US-friendly Delcy Rodriguez, who has led the reopening of the United States embassy in Venezuela—have changed the terms of external engagement. China remains an important economic partner, but Venezuela’s leaders are pursuing a broader range of options than many observers once expected, including negotiating a deal with Washington that would allow the US to take a direct stake in Venezuela’s oil reserves.
In Cuba, Beijing likewise remains an important economic partner. But Chinese support has not eliminated the economic pressures, migration challenges and domestic difficulties confronting Havana. Cuban leaders continue to grapple with food and oil shortages and broader economic difficulties while maintaining stable ties with China and seeking a less confrontational relationship with Washington.
What this means for Honduran shrimp exporters, Chinese firms, and Washington
- Honduran shrimp exporters: the 2023 diplomatic change demonstrates how foreign-policy shifts can produce immediate market access consequences; exporters and their workers will be watching diplomatic signalling and trade-access negotiations closely as they seek to recover lost markets and jobs.
- Chinese firms (including Huawei-linked projects): the Honduran congressional inquiries and Nicaragua’s asset reversal show that commercial arrangements made in politically fluid environments can be reexamined or unwound, especially when domestic political or regulatory pressures rise.
- The United States: pressure and engagement have prompted at least two outcomes—Panama’s exit from the Belt and Road Initiative in early 2025, and policy changes in Nicaragua—demonstrating that Washington’s influence can prompt realignment or recalibration even where Beijing has deep ties.
Across Honduras, Panama, Nicaragua, Venezuela and Cuba the clear pattern is not alignment with one great power over the other. Rather, these governments are systematically preserving room for engagement with both Washington and Beijing — a strategy the source describes plainly: their objective is to maximise the benefits of both relationships while preserving freedom of action. The practical test will be whether individual economic shocks, asset reversals and political turnarounds produce more such recalibrations, or whether they erode the capacity of capitals to extract long-term political leverage from commercial ties.
