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Imperial Preference (later Commonwealth Preference) was a proposed system of reciprocally-levelled tariffs or free trade agreements between different Dominions and Colonies within the British Commonwealth of Nations. The purpose of such practices was to promote the mutual prosperity, and thus unity, of allied imperial nations. While the idea of Imperial Preference is as old as colonialism itself, it:

• was a practice that was not necessarily used all the time;
• did not necessarily include every nation in the British Empire, and
• did not necessarily apply to every commodity.

The idea was fleetingly popular around the turn of the 20th century, as advocated by the tariff reformist Joseph Chamberlain. Problematically for Chamberlain, the new Chancellor of the Exchequer, C. T. Ritchie, was vigorously opposed to any scheme of Imperial Preference. (Ritchie was guided by the free-trade ideas of the leading economists of the time, such as Sir William Ashley.) This ultimately led to a damaging rift within the Conservative Party under Arthur Balfour.

During the 1920s, Imperial Preference became popular once more. Prime Minister Baldwin (1924-29) was a tepid supporter. His Colonial and Dominions Secretary, Amery, was one of its strongest supporters and in 1926 established the Empire Marketing Board to encourage Britons to 'buy Empire'. But Churchill, Chancellor of the Exchequer in the Baldwin government, and always a free trader, was an opponent.

In 1932, representatives of Britain, the Dominions, and the Colonies held the Commonwealth Conference on Economic Consultation and Co-operation in Ottawa, Canada. There was initial agreement on Imperial Preference. But the incompetence and tactless manner of British Dominions Secretary J. H. Thomas so alienated Dominion prime ministers that an opportunity was missed.

In 1935, the Canadian P.M., R. B. Bennett, a Conservative who supported Imperial Preference, was replaced by a Liberal, W. L. M. King. King responded to pressure from U.S. Secretary of State, Hull and abandoned Imperial Preference. The United States was determined to maintain its tariff protections and access to markets, but was vociferously opposed to any such preferences enjoyed by other countries. In the case of the Commonwealth, the U.S. was hostile to it from its inceptions, notwithstanding the fact that in the cases of Canada, Australia, New Zealand and South Africa, there was overwhelmingly preference for a system anchored by the United Kingdom rather than the U.S.

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