The impact of empire on U.S. exports before WWII

December 14, 2023 | Blog
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By Antonio Tena Junguito (Universidad Carlos III de Madrid) and Maria Isabel Restrepo Estrada (Universidad de Antioquia). This blog post is based upon the authors’ article, ‘Power politics and the expansion of US exports, 1879–1938,’ in the Economic History Review.

In studying empire’s effects on trade during the era of high imperialism, the United States provides a novel case. Besides becoming the world’s leading producer of manufactured goods, the question of whether government intervention has boosted exports has been debated historically. Our article forthcoming in the Economic History Review explores the political economy of this export expansion before World War II using a new database with a wide geographic scope.

The acceleration of industrialization in the late 19th century spurred a rethinking of U.S. trade policy. Since Europe was more open to imports of primary products than manufactured goods, the United States needed a proactive foreign policy to expand into new markets. Figure 1 illustrates how the change in U.S. export composition coincided with the change in the distribution of U.S. exports, especially from Europe to the Americas. As discussed in our article, this change also coincides with a shift in U.S. bilateral trade agreements’ strategy.

Figure 1: U.S. exports share by continental geographic destination (1821-1940)

U.S. power politics strategies included tariff walls, reciprocal retaliation, and even formal annexation. The Spanish-American War of 1898 was the most significant imperial intervention during our analysis period, resulting in the establishment of some U.S. colonies and protectorates. In our article, the formal empire includes annexations such as Hawaii, Puerto Rico, and the Virgin Islands, plus the ambiguous case of the Philippines, while the informal empire includes insular territories or protectorates such Cuba, Dominican Republic, Haiti, and Panama.

Artist’s signature not legible; attributed to Philadelphia Press — 1898 cartoon “Ten Thousand Miles from Tip to Tip”. Source: Cornell University – PJ Mode Collection of Persuasive Cartography.

As part of our research, we examine whether the territories that became colonies, protectorates, or were subject to U.S. military interventions were marginal markets within its export expansion (Figure 2). We found that between 1880-1885 and 1934-38, both formal and informal imperial markets grew by more than three time faster than the rest of the foreign market at a time of extraordinary U.S. export expansion. The growth in those imperial markets was largely due to the displacement of U.S. competitors.

Figure 2: Imperial regions export share in total US export

Our analysis also includes other power politics strategies, such as trade agreements, in which we assume asymmetric bargaining power as confirmed by bilateral trade balance with no rich countries in American and Asian countries.  We conclude from our findings that productivity growth and comparative advantage exploitation were necessary but not sufficient. U.S. power politics was indeed used to increase exports, especially to lower-income countries.


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