Dollar diplomacy is a term that pertains to the United States of America’s efforts to gain significant control over a foreign country’s economy during times of distress. This term was made popular during the time of President William Howard Taft, particularly because of its use in Latin American countries and in East Asia. The US made itself a ‘protector’ of these countries’ such as in the economically dwindling Dominican Republic during Taft’s time.
Under the dollar diplomacy, the US funneled large financial resources into Dominican Republic, in exchange for being able to appoint their customs head of choice (among others). In this sense, the dollar diplomacy rescues a country’s ailing economy through exclusive US military and financial assistance, thereby insuring the financial and commercial interests of USA are secured, and secured exclusively, as they will have extended influence over who can conduct business in the country once it has stabilized.
Many people use the term dollar diplomacy disparagingly, seeing US intervention in many foreign conflicts not as a humanitarian act, but rather as a money-making venture. In this scheme, the US prevents other countries from benefitting in a post-conflict country, by expanding its sphere of influence on foreign policy.