How did Dollar Diplomacy aim to expand U.S. trade?

Dollar Diplomacy was a term associated with President William Howard Taft's foreign policy, which sought to use economic power to extend U.S. influence abroad. The strategy primarily focused on encouraging and facilitating American investments in foreign businesses and infrastructure projects. This approach was based on the belief that by promoting American economic interests in other countries, the U.S. could create a more stable environment for trade and investment, thus benefiting both American companies and the economies of the host nations.

By investing in foreign businesses, the U.S. aimed to gain leverage and control over key industries and resources, which would in turn ensure a more significant presence in international markets. Infrastructure developments, such as railroads and telecommunication systems, were particularly targeted because they would enhance the efficiency of trade and open up new markets for American goods. This investment strategy was seen as a way to foster goodwill and secure favorable economic relationships, further solidifying the U.S.'s role as a global economic power.

In contrast, the other options do not align with the primary objectives and methods of Dollar Diplomacy. Tariffs are a trade barrier rather than a means of expanding trade, charitable donations do not directly foster economic ties or investment, and while negotiating free trade agreements may promote trade, Dollar Diplomacy