For many Latin American states, expropriation has been a hammer in the toolbox of land or labor reform. For the United States, expropriation has been a thorn in the side of its companies’ profitable operations in the region—and, therefore, a threat to its interests.
This conflict has played out many times throughout the region. In 1938, the Mexican government expropriated the oil industry under Article 27, which specified the state owned all natural resources; the Roosevelt administration responded with a boycott of Mexican products. In 1952, Guatemalan president Jacobo Árbenz enacted Decree 900, which expropriated the land that the United Fruit Company (UFC) had laid fallow; the Eisenhower administration, with close ties to the UFC, overthrew the Árbenz government two years later. And in 1962, the Cuban government expropriated substantial U.S. landholdings, compensated at the declared tax value of the property. However, U.S. companies, who had artificially lowered prices to pay fewer taxes, cried foul that the Cuban government would not pay them the fair market price for their property. As a result, Congress passed the Hickenlooper Amendment to withhold U.S. aid from countries that expropriated U.S. property “without just compensation” the same year.