U.S. East-West Trade Policy

Abstract

Since 1917, U.S.-Soviet commercial policy has followed a cyclical pattern of high peaks of interchange alternating with deep troughs of mutual economic isolation. The variations in policy on each side have turned on the perceived need to balance the benefits of trade against the political costs — that is, the potential loss of security and diplomatic leverage. Although the United States and the Soviet Union have never been major trading partners, trade has become important to key sectors, particularly agriculture. Following a substantial upturn in commercial relations during the period of detente (1971–1974), U.S.-Soviet economic relations over the next decade shifted steadily from cooperation to confrontation. In particular, the Soviet invasion of Afghanistan in 1979 and the imposition of martial law in Poland in 1981 triggered economic reprisals from the United States, including the 1980 grain embargo, restrictive foreign policy controls on exports, and reductions in credit and bilateral exchange programs.