With Europeans' discovery of the Americas and their exploration of the Pacific, the entire world was linked for the first time in history by seaborne trade. The opening of that trade brought into being three successive commercial empires: the Portuguese, the Spanish, and the Dutch.

The Portuguese were the first worldwide traders. In the sixteenth century they controlled the sea route to India (Map 16.3). From their fortified bases at Goa on the Arabian Sea and at Malacca on the Malay Peninsula, ships carried goods to the Portuguese settlement at Macao, founded in 1557, in the South China Sea. From Macao Portuguese ships loaded with Chinese silks and porcelains sailed to the Japanese port of Nagasaki and to the Philippine port of Manila, where Chinese goods were exchanged for Spanish silver from New Spain. Throughout Asia the Portuguese traded in slaves. They also exported horses from Mesopotamia and copper from Arabia to India; from India they exported hawks and peacocks for the Chinese and Japanese markets. Back to Portugal they brought Asian spices that had been purchased with textiles produced in India and with gold and ivory from East Africa. They also shipped back sugar from their colony in Brazil, produced by African slaves whom they had transported across the Atlantic.

Becoming an imperial power a few decades later than the Portuguese, the Spanish were determined to claim their place in world trade. This was greatly facilitated by the discovery of immense riches in silver, first at Potosí in modern-day Bolivia and later in Mexico. Silver poured into Europe through the Spanish port of Seville, contributing to steep inflation across Europe. Demand for silver also created a need for slaves to work in the mines. (See “Global Trade: Silver.”)

The Spanish Empire in the New World was basically land based, but across the Pacific the Spaniards built a seaborne empire centered at Manila in the Philippines. The city of Manila served as the transpacific bridge between Spanish America and China. In Manila Spanish traders used silver from American mines to purchase Chinese silk for European markets. The European demand for silk was so huge that in 1597, for example, 12 million pesos of silver, almost the total value of the transatlantic trade, moved from Acapulco in New Spain to Manila (see Map 16.4). After 1640, however, the Spanish silk trade declined in the face of stiff competition from Dutch imports.

In the seventeenth century the Dutch challenged the Spanish and Portuguese Empires. The Dutch East India Company was founded in 1602 with the stated intention of capturing the spice trade from the Portuguese. Drawing on their commercial wealth and long experience in European trade, by the end of the century the Dutch emerged as the most powerful worldwide seaborne trading power (see Chapter 19).