Overview
This section explains President William Howard Taft’s "dollar diplomacy" foreign policy, which emphasized economic influence over military intervention, especially in Central America.
Taft’s Foreign Policy
- William Howard Taft’s foreign policy is called "dollar diplomacy."
- Dollar diplomacy focused on advancing U.S. interests abroad through economic investment and loans, not military force.
- Taft used economic leverage to expand American influence, especially in Central America and Asia.
- The strategy aimed to make other countries indebted to the U.S. by buying up their debts.
- Debtor nations then owed money to the U.S. instead of European powers, reducing European influence.
- This policy helped oust economic control of the Western Hemisphere from countries like Great Britain, France, and Germany.
Results and Limitations
- Dollar diplomacy was most successful in Central and South America.
- The U.S. gained more influence in the Western Hemisphere before World War I.
- Efforts to spread U.S. economic influence in Asia were less effective due to strong competition from Russia and Japan.
- The era of dollar diplomacy and American imperialism declined with the outbreak of World War I in 1914.
Key Terms & Definitions
- Dollar Diplomacy — Taft’s policy of using economic power and financial investments to influence other nations’ policies.
- Imperialism — Policy of extending a country's power and influence through diplomacy or military force.
Action Items / Next Steps
- Read the next chapter on U.S. involvement in World War I.
- Review how dollar diplomacy differs from Roosevelt’s and Wilson’s foreign policies.