As Secretary of State, Dulles spent considerable time building up NATO and forming other alliances (the "Pactomania") as part of his strategy of controlling Soviet expansion by threatening massive retaliation in event of a war, as well as building up friendships, including that of Louis Jefferson, who would later write a good-humored biography on Dulles. In 1950, he worked alongside Richard Nixon to reduce the French influence in Vietnam as well as asking the United States to attempt to cooperate with the French in the aid of strengthening Diem's Army. Over time he came to the conclusion that it was time to "ease France out of Vietnam" In 1950 He also helped instigate the ANZUS Treaty for mutual protection with Australia and New Zealand. Dulles was strongly against communism, believing it was "Godless terrorism". One of his first major policy shifts towards a more aggressive posture against communism, Dulles directed the CIA at this point now under the directorship of his brother Allen Dulles, in March 1953, to draft plans to overthrow the Prime Minister Mohammed Mossadegh in Iran . This led directly to the Coup d'état via Operation Ajax in support of Mohammad Reza Pahlavi, the Shah of Iran.
After the war, the United Nations conducted a lengthy inquiry regarding the status of Eritrea, with the superpowers each vying for a stake in the state's future. Britain, the last administrator at the time, put forth the suggestion to partition Eritrea between Sudan and Ethiopia, separating Christians and Muslims. The idea was instantly rejected by Eritrean political parties as well as the UN. The United States point of view was expressed by its then chief foreign policy advisor John Foster Dulles who said:
From the point of view of justice, the opinions of the Eritrean people must receive consideration. Nevertheless, the strategic interests of the United States in the Red Sea Basin and considerations of security and world peace make it necessary that the country [Eritrea] be linked with our ally, Ethiopia.—John Foster Dulles, 1952
A UN plebiscite voted 46 to 10 to have Eritrea be federated with Ethiopia which was later stipulated on December 2, 1950 in resolution 390 (V). Eritrea would have its own parliament and administration and would be represented in what had been the Ethiopian parliament and would become the federal parliament. In 1961 the 30-year Eritrean Struggle for Independence began, following the Ethiopian Emperor Haile Selassie I's dissolution of the federation and shutting down of Eritrea's parliament. The Emperor declared Eritrea the fourteenth province of Ethiopia in 1962.
Dulles was also the architect of the Southeast Asia Treaty Organization (SEATO) that was created in 1954. The treaty, signed by representatives of Australia, Britain, France, New Zealand, Pakistan, the Philippines, Thailand and the United States provided for collective action against aggression. In that same year, due to his relationship with his brother Allen Dulles, the Director ofCIA and a former member of the Board Of Directors of the United Fruit Company, based in Guatemala, Foster Dulles was pivotal in promoting and executing the CIA-led Operation PBSUCCESSthat overthrew the democratically elected Guatemalan government of Jacobo Arbenz Guzmán.
Dulles was one of the pioneers of massive retaliation and brinkmanship. In an article written for Life Magazine Dulles defined his policy of brinkmanship: "The ability to get to the verge without getting into the war is the necessary art." His critics blamed him for damaging relations with Communist states and contributing to the Cold War.
Dulles upset the leaders of several non-aligned countries when on June 9, 1956, he argued in one speech that "neutrality has increasingly become an obsolete and, except under very exceptional circumstances, it is an immoral and shortsighted conception."
In November 1956, Dulles strongly opposed the Anglo-French invasion of Egypt in response to the Suez Crisis. However, by 1958, he was an outspoken opponent of President Gamal Abdel Nasser and stopped him from receiving weapons from the United States. This policy seemingly backfired, enabling the Soviet Union to gain influence in the Middle East.
Dulles focused more attention on the Suez Crisis than on the Hungarian revolution, which was occurring simultaneously. He misunderstood the Hungarian reformist leader Imre Nagy. On October 25, 1956, he sent a telegram to the U.S. embassy in Belgrade expressing his fears that the Imre Nagy-János Kádár government might take "reprisals" against the Hungarian "freedom fighters". By the next day, October 26, State Department officials in Washington assumed the worse about Nagy, asserting in a top secret memorandum: "Nagy's appeal for Soviet troops indicates, at least superficially, that there are not any open differences between the Soviet and Hungarian governments".
Dulles also served as the Chairman and Co-founder of the Commission on a Just and Durable Peace of the Federal Council of Churches of Christ in America (succeeded by the National Council of Churches), the Chairman of the Board for the Carnegie Endowment for International Peace, a Trustee of the Rockefeller Foundation from 1935 to 1952, and was a founding member of Foreign Policy Association and Council of Foreign Relations.
Dulles is said to have made the candid quote, "The United States of America does not have friends; it has interests." With time it has become infamous in some sectors due to the country's future (and previous) foreign policies. Yet, no such quote exists in the historical record—although these words were actually spoken by Charles De Gaulle. The myth appears to have grown out of an incident in 1958 when Dulles traveled to Mexico and anti-American protesters held up signs reading "The U.S. has no friends, only interests."