"Dollar Diplomacy" refers to a foreign policy strategy used primarily by the United States in the early 20th century, particularly during the presidency of William Howard Taft. This approach aimed to extend American influence abroad by using economic power, such as investments and loans, rather than military intervention. The goal was to promote stability and protect American interests in regions like Latin America and East Asia. By encouraging American businesses to invest in foreign countries, the U.S. sought to create favorable conditions for trade and political alliances. This strategy often involved supporting governments that aligned with American economic interests, thereby fostering a network of economic dependencies that could enhance U.S. influence globally.