In the beginning, American businesses in Cuba flourished. In 1892 alone, almost $78 million in products were shipped from the island to markets in America, more than all other nations in Latin America combined. However, exports of products from the American heartland failed to reach even $18 million. The Spanish imposed heavy tariffs on American goods that the Cubans could not afford to pay. The government also imposed a heavy tax on all foreign owned businesses, and cables began to flood across the Atlantic from Washington to Madrid complaining about unfair treatment. Business owners from European nations suffered equally, but the Americans had acquired the lion's share of assets in Cuba.
Revenue of American-owned businesses dropped every year thereafter until 1898, when Cuban exports amounted to little more than $15 million. Imports were less than $10 million. Spanish interference was taking its toll. Like modern politicians, island officials didn't understand that increased taxation stifles commerce, and a large percentage of a small pie is less satisfying than a small percentage of a large pie.
The Spanish government exacerbated the problem by referring all disputes to courts in Madrid, thereby delaying resolution of commercial disputes. America responded by insisting on most-favored nation trading status. It was, after all, importing 75% of all Cuban exports of sugar, 50% of all tobacco, and 50% of its manufactured products.