William Howard Taft used U.S. economic power to address the issue of Latin American debt owed to European countries primarily through the following approach:
He paid off Latin American countries' debts to European countries so that they were indebted to the U.S. instead.
This strategy was part of Taft's "Dollar Diplomacy," which aimed to extend American influence in Latin America and the Caribbean by encouraging investment and financial engagement, thereby securing U.S. interests in those regions.