Editing Spanish–American War (section)

===Postwar American investment in Puerto Rico===
The change in sovereignty of Puerto Rico, like the occupation of Cuba, brought about major changes in both the insular and U.S. economies. Before 1898, the sugar industry in Puerto Rico was in decline for nearly half a century.{{citation needed|date=May 2020}} In the second half of the nineteenth century, technological advances increased the capital requirements to remain competitive in the sugar industry. Agriculture began to shift toward coffee production, which required less capital and land accumulation. However, these trends were reversed with U.S. hegemony. Early U.S. monetary and legal policies made it both harder for local farmers to continue operations and easier for American businesses to accumulate land.<ref>{{harvnb|Bergad|1978|pp=74–75}}.</ref> This, along with the large capital reserves of American businesses, led to a resurgence in the Puerto Rican nuts and sugar industry in the form of large American owned agro-industrial complexes.

At the same time, the inclusion of Puerto Rico into the U.S. tariff system as a customs area, effectively treating Puerto Rico as a state with respect to internal or external trade, increased the codependence of the insular and mainland economies and benefitted sugar exports with tariff protection. In 1897, the United States purchased 19.6 percent of Puerto Rico's exports while supplying 18.5 percent of its imports. By 1905, these figures jumped to 84 percent and 85 percent, respectively.<ref>{{harvnb|Bergad|1978|p=76}}.</ref> However, coffee was not protected, as it was not a product of the mainland. At the same time, Cuba and Spain, traditionally the largest importers of Puerto Rican coffee, now subjected Puerto Rico to previously nonexistent import tariffs. These two effects led to a decline in the coffee industry. From 1897 to 1901, coffee went from 65.8 percent of exports to 19.6 percent while sugar went from 21.6 percent to 55 percent.<ref>{{harvnb|Bergad|1978|p=74}}.</ref> The tariff system also provided a protected market-place for Puerto Rican tobacco exports. The tobacco industry went from nearly nonexistent in Puerto Rico to a major part of the country's agricultural sector.{{citation needed|date=May 2020}}