Question

Two U.S. allies are engaged in a heated dispute over trade.

Answer 1

The use of foreign policy tool that is described in the passage

D. Diplomacy

Explanation:

Diplomacy is the prime and the most often used foreign relations tool.

It ultimately boils down to dialogue between two or more parties with possibility of intervention by a third considered party that can mediate the discussion between them over some disagreement that can be reached to a conclusion mutually.

In the situation like the one given here it is the job of the mediator to make sure that both parties move a little and meet and resolve the conflict somewhere in the middle between them.