Paraguay used its UN General Assembly speech to declare it will not stay neutral on Taiwan, warning that a fight over the Taiwan Strait would hit the whole world economy — a boost for Taiwan and a rebuke to Beijing.

• President Santiago Peña said Paraguay stands with Taiwan, and called Taiwan's exclusion from the UN a stain on the organization.
• He said the risk of conflict in the Taiwan Strait is alarmingly high, and bigger than the current trouble around the Strait of Hormuz.
• His argument was economic: chips are to this century what oil was to the last, and a war there would cut off the supply that powers industry, defense, and AI.
• Paraguay is Taiwan's only remaining ally in South America, and has kept ties for 70 years despite economic pressure from China.
• He pushed other countries to move past statements of support and take real action, offering Paraguay as a mediator.

Outlook: Expect Beijing to keep leaning on Paraguay to switch recognition, while Taiwan points to the speech as proof its diplomatic support is holding.