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I need good reasons, I ve found some such as tariffs and tax rauses but I need more.

2007-03-09 00:36:29 · 2 answers · asked by Reese Renea 1 in Social Science Economics

2 answers

-World War II ( imports and exports were embargoed to certain countries even before the US entered the war in 1941.)
-the great depression messed up the confidence in the US>

2007-03-09 02:43:38 · answer #1 · answered by Santa Barbara 7 · 0 0

During this period the USA had what is referred to as an "absolute" advantage in producing manufactured goods over the rest of the world. On top of this Europe owed America vast sums of money due to war debts after WW1, and America's trade tariffs made it impossible for Europe to sell America anything, hence it was impossible for them to earn the currency to pay America back.

The only economies with a trade surplus against the USA during this period were a few tropical countries like Brazil, who exported coffee and other tropical, specialist products to the USA.

So because most of the world couldn't sell much to the USA, they couldn't afford to buy much from the USA, and so despite the USA being the richest and most productive economy in the world, it was a very small player in terms of world trade.

The great depression initially isolated the USA even further, as America stopped buying luxury products from Europe and Japanese silk. Then in the mid-thirties, as the last European countries droped the gold standard, what were to become the "Allies" of WW2 (the USA, Britain and France) signed some trade agreements to lower tariffs and end their economic isolation.

2007-03-09 17:11:43 · answer #2 · answered by Henry R 2 · 0 0

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