In the early 20th century, as modern transportation and communication systems developed, Bermuda became a popular destination for wealthy American, British, and Canadian tourists.

While the tariff enacted in 1930 by the US against its trading partners ended Bermuda's once-thriving agricultural export trade – primarily fresh vegetables to the US, it helped spur the overseas territory to develop its tourist industry, which is second only to international business in terms of economic importance to the island.

During World War II, Bermuda became a significant United States Armed Forces site because of its location in the Atlantic Ocean.

In 1941, the US signed a lend-lease agreement with the UK giving the British surplus US Navy destroyers in exchange for 99-year lease rights to establish naval and air bases in Bermuda.

The Government of Bermuda has begun to pursue some international initiatives independent of the UK in recent years.