Honduran President Xiomara Castro announced on Tuesday that her government is cutting its diplomatic ties with Taiwan in favor of China.

China’s Foreign Ministry responded by expressing its willingness to establish ties with Honduras “under the One China principle.”

Honduras will join Gambia, Sao Tome & Principe, Panama, the Dominican Republic, El Salvador, Burkina Faso, Solomon Islands, Kiribati, and Nicaragua in making the shift in the last ten years.

The decision reduces Taiwan’s diplomatic allies to only 13—a measure of Washington’s falling economic and political influence in Latin America in relation to China, which the Pentagon has branded as the main threat in the region. At the beginning of the millennium, all seven countries on the Central American isthmus recognized Taiwan, now only Guatemala and Belize remain. The rest of those with ties to Taipei consist of Paraguay, a collection of small island nations in the Caribbean and the Pacific, and the Holy See.

In the second largest of the remaining countries, Paraguay, outgoing President Mario Abdo Benítez has warned his successor that it would be a “mistake” to break ties with Taiwan, but last September he asked Taiwan to invest at least $1 billion in the country to fend off internal pressures to make the switch.

A 2021 study in Foreign Policy Analysis found that Paraguay was losing 1 percent of its yearly GDP by maintaining ties with Taiwan.

Honduran Foreign Minister Eduardo Reina explained on television Wednesday that the decision to sever ties to Taipei was based upon economic considerations after Taiwan refused to increase its aid and credit lines. “Cooperation with Taiwan adds up to $50 million [yearly], which is what Honduras collects in taxes in a day,” he said. “The idea is to seek mechanisms for greater investments, trade.”

Reina then claimed that establishing greater economic ties with China is ultimately aimed at meeting the urgent needs of the “Honduran people.” However, the decision doesn’t alter the position of Honduras in world capitalism as a cheap labor platform with close access to the US market.

In the context of a “nearshoring” push by Washington to incentivize corporations to move production from Asia closer to the United States, the drive to compete for Chinese capital will only add to pressures to maintain widespread poverty as a means of keeping wages low. Currently more than seven million of the 10 million Hondurans live under the official poverty line.

Its “left” demagogy notwithstanding, the capitalist Castro administration took this decision at the behest of the Honduran oligarchy. This was shown by the reaction of Armando Urtrecho, head of the main Honduran business organization COHEP, which previously backed ties with Taiwan to maintain US support. Speaking in front of a USAID poster and the US flag at an event Wednesday, Urtecho told reporters that he neither supports nor rejects ties with Beijing.

The United States has historically and hypocritically coerced other countries to maintain diplomatic ties with Taiwan to counter Chinese influence globally, even as Washington itself has formally recognized Beijing and not Taipei since 1979.

The relations between Taiwan and Central America were originally cemented on the basis of anti-communism and blood as Taipei provided aid, arms and military training to a series of US-backed military dictatorships and right-wing movements that carried out murderous repression in the region.

Legislators from both US parties responded to Castro’s announcement with threats. “Honduran President Xiomara Castro is moving her country closer to Communist China while the world is moving away. The Honduran people will suffer because of her failed leadership,” tweeted Republican Senator Bill Cassidy.

Meanwhile, Democrat Bob Menendez, chair of the Senate Foreign Relations Committee, wrote that the decision “will have implications lasting long beyond the current leadership… A decision to recognize Beijing is not about the competition between the US & China, but it is about the kind of future that Hondurans want to build for themselves & their children.”

Republicans and Democrats in Congress have previously threatened to introduce legislation that would cut ties with and aid to governments that switch from Taipei to Beijing. In Honduras, the Obama administration backed a military coup in 2009 that ousted president Manuel Zelaya (2006-2009), Castro’s husband, who had expressed interest to Chinese diplomats in recognizing Beijing, while also increasing economic ties with the Venezuelan government of Hugo Chavez.

But even the coup regime under President Porfirio Lobo (2010-2014) attempted to establish ties with Beijing, which at the time did not seek to disrupt a rapprochement with Taipei. Subsequently, president Juan Orlando Hernández (2014-2022), who will be tried in New York for drug charges next month, agreed to a $300 million loan from Beijing to build the Patuca III dam.

Castro had promised during her electoral campaign to establish ties with Beijing. However, reflecting fears of US reprisals, she said as recently as January 29 that establishing diplomatic ties with China was not a priority. Foreign minister Reina similarly insisted on February 2 that negotiations with China for a new hydroelectric dam did not mean they would establish official ties.

Reina even felt compelled on Wednesday to clarify, “We’re not looking to break our relationship with the United States.”

According to the Honduran Central Bank, 30.9 percent of exports and 31.4 percent of imports are with the United States, compared to 0.2 percent and 17.3 percent, respectively, with China.

The move takes place as the Biden administration rushes headlong to turn Taiwan into a frontline state for a war against China, even as the Pentagon escalates its involvement in the war against Russia over Ukraine.

Biden has effectively ended its “strategic ambiguity,” whereby Washington formally recognized Taiwan as part of China under Beijing’s “One China” policy, while arming and keeping strong relations with Taipei.

Amid frequent visits of top officials between both countries, the White House formally pledged to arm Taiwan and train its troops on US soil, while sharply increasing the presence of US troops in the island.

Last month, Washington canceled a planned diplomatic visit to Beijing and struck down a Chinese “surveillance balloon” and several other unidentified objects to whip up a war frenzy against China. On Wednesday, Australia announced that it will purchase US nuclear-powered submarines as part of the US-led military encirclement of China.

The Xiomara Castro administration, like the other “Pink Tide” bourgeois regimes in Latin American, is entirely committed to defending the capitalist nation-state framework used by the national ruling elites to institutionalize their corrupt deals and by US imperialism to plunder and dominate the region. Consequently, no bourgeois political force offers an alternative to US imperialist oppression and the drive to World War III.

Castro’s recognition of Beijing will only help drag the country and the region further into the looming conflagration between the United States and China, both nuclear powers with the world’s largest economies and militaries.

The only alternative to imperialist war is the political mobilization of the international working class against capitalism and its nation-state system. As explained by Leon Trotsky in the 1934 statement “War and the Fourth International”:

South and Central America will be able to tear themselves out of backwardness and enslavement only by uniting all their states into one powerful federation. But it is not the belated South American bourgeoisie, a thoroughly venal agency of foreign imperialism, who will be called upon to solve this task, but the young South American proletariat, the chosen leader of the oppressed masses.