What Is an Embargo? Definition and Examples

An embargo is a government-ordered restriction of commerce or exchange with one or more countries. During an embargo, no goods or services may be imported from or exported to the embargoed country or countries. Unlike military blockades, which may be viewed as acts of war, embargoes are legally-enforced barriers to trade.

In foreign policy, embargoes usually result from strained diplomatic, economic or political relationships between the countries involved. For example, since the Cold War, the United States has maintained an economic embargo against Cuba over human rights violations by the island nation’s Communist government.

Types of Embargoes

Embargoes take several different forms. A trade embargo bars the export of specific goods or services. A strategic embargo prohibits only the sale of military-related goods or services. Sanitary embargoes are enacted in order to protect people, animals, and plants. For example, sanitary trade restrictions imposed by the World Trade Organization (WTO) ban imports and exports of endangered animals and plants.

Some trade embargoes allow the exchange of certain goods, such as food and medicine, to meet humanitarian needs. In addition, most multinational embargoes contain clauses allowing some exports or imports according to a limited set of restrictions. 

Effectiveness of Embargoes

Historically, most embargoes eventually fail. While the restrictions imposed might succeed in changing the policies of a democratic government, citizens of countries under totalitarian control lack the political power to influence their governments. In addition, totalitarian governments typically have little concern for how the trade sanctions might harm their citizens. For example, U.S. trade embargo and economic sanctions against Cuba, which have been in effect for over 50 years, have largely failed to change the repressive policies of the Castro regime.

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Examples of Sanctions in International Relations

By Barry Kolodkin

Since the end of the Cold War, several Western nations have attempted to change the policies of the Russian Federation through a variety of economic sanctions. However, the Russian government has been largely unresponsive to the sanctions, contending that the sanctions are intended to weaken the nation’s economy by replacing the government of President Vladimir Putin.

Russia has imposed economic sanctions against its own satellite nations of Georgia, Moldova and Ukraine. These sanctions were enacted in an attempt to halt these nation's drift toward Western-style, capitalist economies. So far, the sanctions have met with little success. In 2016, Ukraine entered into a multinational free trade agreement with the European Union.

Consequences of Embargoes

Embargoes are not violent like guns and bombs, but they still have the potential to harm the people and the economies of the nations involved.

Embargoes can cut off the flow of essential goods and services to the civilians of the embargoed country, potentially to a harmful degree. In the country that imposes the embargo, businesses may lose out on opportunities to trade or invest in the embargoed country. For example, under current embargoes, U.S. companies are banned from potentially profitable markets in Cuba and Iran, and French shipbuilders have been forced to freeze or cancel scheduled sales of military transport ships to Russia.

In addition, embargoes usually result in counter-attacks. When the U.S. joined other Western nations in applying economic sanctions against Russia in 2014, Moscow retaliated by banning the importation of food from those nations.

Embargoes also hold consequences for the world economy. In a reversal to the trend toward globalization, companies are beginning to see themselves as dependent on their home governments. As a result, these companies hesitate to invest in foreign nations. Additionally, global trade patterns, which are traditionally influenced solely by economic considerations, are increasingly forced to respond to geopolitical alignments.

According to the Geneva-based World Economic Forum, the result of multinational embargoes is never a “zero-sum game.” Backed by the might of its government, the nation with the stronger economy can do more damage to the target country than it will suffer in return. However, this punishment does not always succeed in forcing the embargoed country's government to change its perceived political misbehavior.

Notable Embargo Examples

In March 1958, the United States imposed an embargo banning the sale of arms to Cuba. In February 1962, the U.S. responded to the Cuban Missile Crisis by expanding the embargo to include other imports and most other forms of trade. Though the sanctions remain in effect today, few of America’s old Cold War allies still honor them, and the Cuban government continues to deny the Cuban people basic freedoms and human rights. 

During 1973 and 1974, the United States was the target of an oil embargo imposed by member nations of the Organization of the Petroleum Exporting Countries (OPEC). Intended to punish the U.S. for its support of Israel in the Yom Kippur War of October 1973, the embargo led to sky-high gasoline prices, fuel shortages, gas rationing, and a short-term recession.

The OPEC oil embargo also spurred ongoing oil conservation efforts and development of alternative energy sources. Today, the U.S. and its Western allies continue to support Israel in the Middle East conflict.

In 1986, the United States imposed strict trade embargoes against South Africa in opposition to its government’s long-standing policies of racial apartheid. Along with pressure from other nations, the U.S. embargoes helped result in the end of apartheid with the election of a fully racially-mixed government under President Nelson Mandela in 1994.  

Since 1979, the United States has Office of Foreign Assets Control has enforced a series of economic, trade, scientific, and military sanctions against Iran, including an embargo preventing U.S. businesses from dealing with the country. The sanctions have been imposed in response to Iran’s illegal nuclear weapons program and its continued support of terrorist organizations including Hezbollah, Hamas, and Shi’ite militias in Iraq.

Since the September 11 terrorist attacks of 2001, U.S. embargoes have increasingly targeted countries with known ties to terrorist organizations considered to pose a threat to national security. As these embargos have become more widespread, so have trade wars.

When President Donald Trump took office in 2017, he vowed to make it easier for U.S. consumers to buy American-made products. As he imposing ever-heftier import taxes and tariffs on certain goods entering the U.S., some nations, highlighted by China, struck back with embargos and trade sanctions of their own.

Sources

• Klestadt, Andrea. US Trade Embargoes—Are They Effective Tools to Promote Change? NCBFAA.
• “Economic Sanctions as a Foreign Policy Tool?” International Security, Vol. 5, No.2. (1980).
• Trenin, Dmitri. “How effective are economic sanctions?” World Economic Forum (2015).
• “Case of the Day: Tracing the Effects of the Oil Embargo.” Reed College.