American foreign policy changed drastically between 1890 and 1914, from isolationist to interventionist. This change was due to economic factors as well as several other important factors. Foreign Policy is the way a certain country deals with other countries. The Panama Canal was built (and completed by 1914) once the US had acquired a strip of land in Panama so it could build a canal. This would have been economically beneficial for America because it would have allowed trade with other countries more easily. It would have allowed the transportation of goods trans continentally in a much quicker time, between the Atlantic and Pacific. It would also have been a lot cheaper to travel through the canal then have to go all the way round to the bottom of South America, as less fuel would be used. Furthermore, the US could charge states to use the canal on a regular basis. The rapid growth in the American economy proved that the USA was able to control new markets overseas, and meant that there were surplus goods that could be sold abroad and transported through the canal. The canal helped a lot as it meant that the naval ships could be able to travel quickly in defensive situations and their attack would be quicker as well. America used this economic power to influence the introduction of dollar diplomacy, which gave money to support the trade links.
Although there were many important economic factors for the shaping of the American foreign policy, there were many other reasons for the shaping of the foreign policy such as; Key individuals, especially Theodore Roosevelt. Roosevelt had a very large effect on the foreign policy. He had very imperialistic ideas and these ideas were reflected in the policies at the time. In 1901, Congress passed the Platt Amendment, this authorised American intervention in the international and domestic affairs in Cuba. This was a huge change in the American foreign policy, under Roosevelt's influence; the policy was starting to look at more expansionist ideas.