The Zollverein, or German Customs Union, was a coalition of German states formed to manage customs and economic policies within their territories. Established in 1818, the original union cemented economic ties between the various Prussian and Hohenzollern territories, and ensured economic contact between the non-contiguous holdings of the Hohenzollern family, which was also the ruling family of Prussia. It expanded between 1820 to 1866 to include most of the German states. Austria was excluded because of its highly protected industry; this economic exclusion exacerbated the Austro-Prussian rivalry for dominance in central Europe, particularly in the 1850s and 1860s. With the founding of the North German Confederation in 1866, the Zollverein included approximately 425,000 square kilometres, and had produced economic agreements with non-German states like Sweden and Luxembourg.

Historians have seen three Prussian goals: as a political tool to eliminate Austrian influence in Germany; as a way to improve the economies; and to strengthen Germany against potential French aggression while reducing the economic independence of smaller states. The Customs Union created a larger market for German-made farm and handicraft products and promoted commercial unification under fiscally sound economic parameters. While the Union sought to limit trade and commercial barriers between and among member states, it continued to uphold the protectionist barriers with outsiders.