Abstract: Mind the Dollar Gap: A Business History of US Trade Policy, 1940-1952

Sebastian Huempfer


Revisionist scholars of the Cold War argue that the United States provided aid to Western Europe after World War II in order to secure export markets. Drawing on the archives of government agencies and business interest groups, I argue in this paper that the Truman administration worked with business elites to increase imports from Western Europe and narrow the American trade surplus rather than pursue export markets. In the short term, import promotion was motivated by the idea of the “dollar gap”, i.e. the fear that the Western European economies could not recover without an improvement in the region’s balance of payments situation vis-à-vis the United States. More broadly, efforts to increase imports were the continuation of a development that started with the emergence of the United States as a creditor nation in 1917 and accelerated dramatically during World War II, when post-war planning efforts empowered liberal internationalist business leaders and allowed them to convert many of the major business interest groups to the view that the United States needed a high level of imports. This fundamentally changed the political economy of US trade policy.