China Overtakes Brazil as Uruguay’s Top Trading Partner

Uruguay assumed the rotating presidency of Mercosur this week as its trade ties with China continue to deepen, making China its largest trading partner and relegating Brazil to second place.

According to a report by Assis Moreira in Valor Econômico, during the recent review of Uruguay’s trade policy by the World Trade Organization (WTO), observers highlighted the country’s changing trade patterns. Brazil had long been the leading supplier of goods to its Mercosur partner, but its share of Uruguay’s imports fell to 21.2% in 2024, while China’s share rose to 22.1%.

In 2025, China’s growing importance as a supplier to Uruguay was reflected in imports totaling $2.97 billion, compared with $2.74 billion from Brazil. Chinese exports to Uruguay were 8.5% higher than Brazil’s, despite the existence of Mercosur’s common market. That trend has gained further momentum with the influx of Chinese-made vehicles across the region. Imports from China were concentrated mainly in automobiles and auto parts, machinery and electronic equipment, plastic products, and manufactured goods. Imports from Mercosur, particularly Brazil and Argentina, consisted primarily of vehicles, fuels, machinery, and intermediate industrial goods.

On the export side, China remained the leading destination for Uruguayan products, accounting for 26% of total exports, compared with 14% for Brazil and 11% for the United States. At the WTO, China welcomed the fact that it is now Uruguay’s largest trading partner and its main export market. “Although China and Uruguay are geographically among the most distant countries in the world, over the 38 years since establishing diplomatic relations they have built a relationship of mutual trust that transcends distance,” China’s representative said.

The administration of Donald Trump has reacted to China’s expanding presence in Uruguay. According to reports in the Uruguayan press, Economy Minister Gabriel Oddone told business leaders during a private meeting in March that the United States would exert “unimaginable” and “unsustainable” pressure on Uruguay to “break” its trade relationship with China. U.S. exports to Uruguay declined from 10.9% of the country’s imports in 2017 to 6.4% in 2024. The European Union’s share also slipped, from 14.4% to 13.3% over the same period, while China’s share increased by 2.1 percentage points.

All of Uruguay’s major trading partners have been losing ground to China. In Brazil’s case, however, the situation is more sensitive because the two countries are partners in a common market. Analysts familiar with the region say Brazil lacks a long-term strategy, investment, deeper logistics and business integration, and a more balanced trade relationship with its neighbors. They argue that if Brazil wants to increase exports to neighboring countries, it also needs to import more from them.

At the WTO, Uruguay noted that it submitted its application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in December 2022. Following its review, the bloc’s commission decided in November 2025 to launch Uruguay’s accession process. The CPTPP comprises a trade bloc representing more than 580 million consumers and about 15.6% of global GDP, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United Kingdom, and Vietnam.

At this week’s Mercosur meeting, Brazilian Foreign Minister Mauro Vieira again defended the importance of regional integration, describing it as “capable of regulating and expanding trade flows amid adversity, making it a valuable asset not only for our countries but also for our partners in other regions.” Vieira also acknowledged that “our Common External Tariff covered only 36.4% of the value of our combined imports in 2025.” According to the minister, “initiatives that create further exceptions to the Common External Tariff, which is already being applied less frequently, tend to undermine the integrity of the customs union and could lead to a reassessment of the integration process, including the free trade area that binds us together.”

Strategic Implications for Investors

This shift underscores Uruguay’s strategic pivot toward Asia, particularly China, as a key trade partner, which may enhance its attractiveness as a stable, open economy for foreign investors. The deepening ties with China and the potential accession to the CPTPP signal Uruguay’s commitment to diversifying its trade relationships beyond Mercosur, potentially reducing its dependence on regional partners. For international investors and expats, this could mean greater access to global markets, increased trade flows, and a more resilient economy, though it also introduces geopolitical risks given U.S. pressure. Uruguay’s ability to balance these relationships will be critical for maintaining its reputation as a safe and business-friendly destination.