China becomes Ecuador’s largest trading partner as benefits of 2024 trade agreement take effect

China has surpassed the United States and the European Union as Ecuador’s largest non-oil trading partner and experts say China’s dominance in the sector to grow. “The import-export landscaped has been rearragned and it is because of the trade agreement signed with China in 2024,” says Magaly Caicedo, president of the Ecuadorian-Chinese Chamber of Commerce.

Experts predict rapid growth in trade with China as a result of the 2024 agreement.

During the first year of the agreement, Caicedo says, Ecuadorian companies have been exploring and developing partnerships with their counterparts in China. “The business arrangements are different with China than with other countries, of course, and details must be worked out before transactions begin,” she says. “I expect to see a major increase in trade in 2025 and first quarter numbers already reflect this.”

She adds: “China has a population of 1.4 million with about 700 million belonging to the middle class, so the potential for growth is impressive.”

More than 11,000 Ecuadorian companies have established relationships with China companies, of which about 600 are exporters, according to the trade association Fedexpor.

The trade agreement will open doors beyond the Ecuador’s largest exports bananas and shrimp, Caicedo says. “The elimination and reduction of tariffs will encourage export growth for other agricultural and industrial products. “We are already exporting products such as balsa, cocoa, coffee, pitahaya or toquilla straw hats, which have been well received in the Chinese market and sales will only increase,” she says.

The trade war initiated by the U.S. is likely to provide an added boost for business with China, Caicedo and other trade officials say.

Low or zero tariffs are also a benefit of Ecuadorian consumers, says Fedexpor’s Gustavo Picasso. “Imports of Chinese automobiles doubled since 2022 and will soon amount to more than half of the total market,” he says. In the first quarter of 2025, 43% of sales were of Chinese vehicles, dealers report.

He adds: “When buyers are offered savings of 20% to 30% to comparable models from Europe, Japan and North America, it’s obvious why they are choosing Chinese brands.”

Genaro Baldeón, president of the Ecuador Association of Automotive Companies agrees and says the “upside to sales remains enormous” as the 10% to 20% tariff on vehicle imports is reduced 2.3% a year. “Prices are already much lower than other imports and they will continue to decline,” he says.

Imports of other low-cost consumer products will not only benefit consumers, but retail businesses as well, says Picasso. “You will see an expansion in the retail sector to accommodate more volume, and this means more employment and a benefit to the real estate market.” He says electronic products and apparel will experience the greatest growth in sales.