Final answer:
Congress' lack of power to regulate trade under the Articles of Confederation led to economic problems due to interstate discrimination, foreign market dominance, and the inability to enforce uniform commercial policies, hindering the US economy.
Step-by-step explanation:
The lack of Congress' power to regulate trade under the Articles of Confederation led to several issues within the United States. Without the ability to impose tariffs or regulate both interstate commerce and foreign trade, states sometimes discriminated against each other, fostering unfair trade relations. Such practices caused economic discord as states engaged in trade protectionism against one another, setting up their own tariffs on goods from neighboring states. This not only made interstate trade expensive and complex, but also weakened the economy by allowing foreign markets, particularly British merchants, to flood the U.S. with low-priced goods, undermining American businesses.
Additionally, the Articles offered no means to enforce compliance with trade agreements by the states, leading foreign powers like Great Britain and Spain to view trade pacts with suspicion. The volatility in trade policy made it difficult for American exporters to conduct business. Finally, with the power to regulate commerce logically vested in a central government, it would have allowed the establishment of federal tariffs to protect domestic merchants from foreign competition and raise revenue for internal improvements such as infrastructure, which in turn would have supported business growth.
In summary, the failure to centralize trade regulation under the Articles of Confederation hampered economic development, allowed states to engage in economically damaging protectionism, and contributed to an unsteady foreign trade environment.