Economic issues did to a large extent constitute the most significant factor in shaping the United States foreign policy with Britain between 1890-1990. This is because throughout this period of history, economic issues are the underlying factor that dominated the United States domestic policy which in turn drove its foreign policy. However, there were also many strategic, political and social factors which contributed to the shaping of the United States foreign policies with Britain, some very important and other less so.
Foreign policy determines how the United States conduct its relations with other countries and in this case with Britain specifically. It is designed to maintain its objectives and extend the United States interests of national security, economy and idealism. The stability of the United States economy has a major effect on the well-being of its society and the amount of military power it can obtain to influence Britain. Consequently, the United States has remained consistent with its economic interests by using its foreign policy to protect trade, access resources and develop new methods of industry. There have been both short and long term results of these actions.
After 1890, the United States was placing a huge emphasis on its industrial production and had emerged as a booming industrial power. This was evident as the United States was producing twice the amount of its closest competitor-Britain. The expansion of the United States economy was marked by the rise of big business and the emergence of huge industrial companies which merged to make vast combined enterprises linking manufacturing, railroads and shipping. There were also rapid expansions of banking and finance as J. Pierpont Morgan was the most famous big financiers who provided the capital for industrialisation. This result was due to the large productive capacity and the almost unlimited natural resources the United States had posses over Britain. Furthermore, the relatively new and unregulated financial system meant that ‘robber barons’ could use ruthless methods to defeat their market competitors such as Britain. This had enabled the great entrepreneurs to wield massive political influences, particularly in the Republican Party which laid foundations for the future United States domination of the world economy, thus shaping the United States foreign policy with Britain at an early stage of the period between 1890-1990.
Following the outbreak of the First World War in August 1914, trade issues brought the United States closer to Britain and its allies whilst furthering away from the Central Powers. This meant that the United States experienced a political change from neutrality to interventionism. Between 1914 and 1916, the United States trade with Britain had increased by four times. Although most of the Americans wished to remain neutral and impartial, massive American and financial support for the allies meant taking sides. This was evident when the policy of ‘avoiding all foreign entanglements except trade’ became illogical. This was because the trade links led in the direction of a strategic alliance despite the objections from many politicians and ordinary citizens about the matter. As a result, the United States intervention in the First World War fundamentally changed the course of the conflict as a direct result from the predominant role of trade, thus contributing to the shaping of the United States foreign policy with Britain between 1890-1990.
By 1920, the United States entered a period of ‘economic boom’ and turned its back on Britain for much of the next 20 years. Britain’s economy was struggling to deal with the aftermath of the First World War as the British debt reached up to 180% of GDP. A new Republican President, Warren G. Harding was elected and had promised a return to ‘normalcy’ where life would be as it was before the war. This was evident when the Americans refused to join the League of Nations which was purposed by President Wilson. More importantly, they opposed his efforts to make the United States a member and there was growing opposition in the United States Senate. This was because many people felt that the devastating war had been a European affair which really had little to do with the United States interests. As a result, the national mood was moving towards isolationism and fear of entanglements with Britain and other foreign nations, thus shaping the United States foreign policies with Britain between 1890-1990.
In 1929, there was a turning point in the United States economy as the stock market crash precipitated a global recession, thus causing the United States government to become even more isolationist towards Britain. The United States international trade had been drastically reduced, falling from $10 billion in 1929 to $3 billion in 1932. This indicates that without a strong economy the United States loses its power and influences over Britain. This is because the Wall Street Crash caused problems for industries and the banking sector which in turn affects the running of day to day business. Moreover, it affected business confidence, slowing down consumer spending and damaging production. As a result, several staple industries faced long-term difficulties and the weakness of the older industrial sector also undermined trade unions, thus shaping the United States foreign policies with Britain between 1890-1990.
Between the 1930s and 1940s, the United States turned inward to focus on the colossal economic hardship and the worsening situation at home. When Franklin D. Roosevelt made his New Deal speech in June 1932, the United States was in a severe economic depression. Over twelve million Americans were unemployed and the number of people out of work was going up by 12,000 every day. This was evident when the United States became increasingly insensitive to the obliteration of fellow democracies, leaving Britain at the hands of brutal fascists leaders such as Hitler and Mussolini. This clearly indicates that the United States was more concerned with its economic affairs and own interests rather than foreign affairs. The claim can be further supported as isolationism was also encouraged following Hoover’s approval of the Hawley-Smoot Tariff of 1930. This act raised the tariff to an unbelievable sixty percent which caused a closed down to most of the trade with Britain. In addition, many Americans felt that the United States had been tricked to join World War One for the wrong reasons and were determined to avoid making the same mistake twice. As a result, the United States was determined to stay out of war at all costs giving Britain no support. Furthermore, Americans were disappointed to learn that World War One was not the ‘War to End Wars’ as advertised by the government propaganda. This factor further motivated Americans to adopt a largely isolationist policy, thus shaping the United States foreign policies with Britain between 1890-1990.