A dedicated believer in free markets, during the 1930s Clayton supported President Franklin D. Roosevelt's international tariff reductions while opposing the New Deal domestic statism and welfare programs. In 1940 Clayton joined the Century Group, which supported U.S. aid to Britain and intervention on the Allied side in World War II. Clayton served successively as advisor to Coordinator of Inter-American Affairs Nelson Rockefeller (August–October 1940), deputy federal loan administrator (October 1940–February 1942), and assistant secretary of commerce (February 1942–January 1944), focusing on procuring international strategic materials for the American war effort.
As assistant (December 1944–August 1946) and then undersecretary of state for economic affairs (August 1946–October 1947) and special advisor to the secretary of state (October 1947–1948), Clayton sought to rebuild the international trading system. As such, he was heavily involved in negotiating the 1948 General Agreement on Trade and Tariffs (GATT), the beginning of forty years of trade liberalization. A strong Anglophile, in December 1945 he arranged a $3.75 billion loan to Britain, albeit one whose ultimate price was British dismantling of the sterling area in favor of a convertible currency. Clayton's personal observations during a spring 1947 trip to Western Europe impelled him to write a memorandum for Secretary of State George C. Marshall urging a major American economic assistance program for that area, which became an important factor in the secretary's subsequent advocacy of the European Recovery Program (also known as the Marshall Plan).
Retiring to Houston in November 1948, Clayton became a staunch advocate of an Atlantic Union of the Western democracies, while his faith in free trade remained unabated. During the 1950s and 1960s he also repeatedly though unavailingly urged the U.S. government to recognize and trade with the communist People's Republic of China (PRC). Clayton died in Houston on 8 February 1966.
Fossedal, Gregory A. Our Finest Hour: Will Clayton, the Marshall Plan, and the Triumph of Democracy. Stanford, CA: Hoover Institution Press, 1993.; Garwood, Ellen. Will Clayton: A Short Biography. Austin: University of Texas Press, 1958.; Roberts, Priscilla. "William L. Clayton and the Recognition of China, 1945–66: More Speculations on 'Lost Chances in China.'" Journal of American-East Asian Relations 7(1–2) (Spring–Summer 1998): 5–37.