An embargo is a state-sponsored prohibition on the movement of goods between nations. Embargoes amount to economic warfare and in fact are often used during times of war and hostilities. Embargoes are often employed during peacetime when they prohibit commercial trade with individuals, businesses, or specific countries sans military action or the threat of military action. Embargoes are a legal prohibition on commerce. They may be selective or universal in their prohibition of goods and they may embrace both imports to a country and exports from a country. Regardless of their scope, embargoes are always punitive in nature; their purpose is not to protect home markets (that is what tariffs are for) but rather to punish another country.
In spite of its punitive nature, an embargo is not a military act of war. An embargo is different from a blockade, which is a military obstruction of commerce by one country against another and can be construed as an act of war. A boycott is an embargo of sorts on purchases, but it is usually conducted by private groups with specific social goals rather than nations with political ends. Some of the more well-known 20th century embargoes have been the U.S.- and U.K.-sponsored oil embargo against Japan in 1940, the U.S. embargo against Cuba, the U.S. wheat embargo against the Soviet Union during the Carter presidency, and the United Nations -sanctioned embargoes against South Africa and Iraq.
The most famous embargo in U.S. history was Thomas Jefferson's embargo of 1807. Jefferson sought to punish Great Britain and France by with-holding American raw materials and finished goods and by suspending British and French exports to the United States. This embargo was in retaliation for French threats against American vessels and British impressment of American sailors.
One of the longest embargoes in U.S. history is its ongoing one against Cuba. Fidel Castro's regime is being punished for numerous things including: establishing a communist dictatorship within 90 miles of Florida, attempting to export his revolution to various Latin American countries, seizing American properties valued at somewhere between $6 and $60 billion, and allowing the Soviet Union to turn the island into a nuclear-missile base aimed at the United States. Castro seized power from Fulgencio Batista in 1959. Since 1962, when the United States and Cuba broke off diplomatic relations, it has generally been taboo for Americans to travel to or trade with Cuba. Since 1992 it has been unlawful for foreign subsidiaries of American firms to do business there. The embargo means to restore democracy to Cuba by weakening that nation's economy to the point that Castro can no longer govern. Initially the embargo was largely ineffectual because Cuba received huge amounts of economic aid from the Soviet Union. In 1991, however, the Soviet Union broke apart and the foreign-aid spigot was abruptly turned off. Although donations of food and medicine have been excepted it is estimated that the embargo has cost Cuba $44 billion over the years. Since the early 1990s, however, there has been a lot of pressure on the U.S. government to end the embargo as Cuba is no longer the threat to U.S. security that it was as a Soviet satellite. The pressure was energized in early 1998 when Pope John Paul II visited Cuba and denounced the embargo. The U.S. government is also beginning to feel pressure from American companies seeking to do business with Cuba. The ban on travel to Cuba is not enforced and it was estimated that in 1998 2,000 American business executives would travel to Cuba laying the groundwork for the day when the embargo is lifted. The Cuban market for basic goods and services is estimated to be between $2 and $4 billion annually. Because of the political strength of the Cuban exile community in southern Florida, however, it is doubtful that the embargo will be lifted as long as Castro is in power.
A famous and ultimately ill-fated embargo with global repercussions was the Arab oil embargo of the 1970s. Begun in 1973 the embargo was meant to punish the Netherlands and the United States for their support of Israel during the Yom Kippur War. Arab oil-producing nations, however, with the involvement of the Organization of Petroleum Exporting Countries (OPEC), instituted sharp cutbacks in their oil output. The immediate effect of their actions was a major oil shortage and a subsequent disruption of financial markets, a dramatic rise in the price of oil, and panic at the gasoline pumps. The embargo ultimately failed because of the increased use of natural gas, nuclear energy, and coal. Facing sharp cuts in oil revenue, the countries began pumping oil in excess of their official quotas. These actions resulted in a decline in the demand and price of oil.
As Richard Ellings points out in his book Embargoes and World Power, embargoes have their advantages and their downside. Embargoes are less risky and less expensive than armed intervention. Generally they are deemed less noxious to neutral or third parties and, therefore, are preferable compromises between going to war or taking no action whatsoever. Embargoes, however, often have drawbacks. The target country may consider a country using an embargo instead of military action as lacking resolve. A target country may respond with its own counterembargo. Furthermore, other countries must cooperate with the embargo for it to be truly effective. During the U.S. wheat embargo on the Soviet Union, that country quickly turned to South America for its grain and cereal needs. Likewise President Jimmy Carter's arms embargo on various Central American countries failed when they turned to European arms manufacturers for equipment.
[ Michael Knes ]
Chalabi, Fadhil J. "OPEC: An Obituary." Foreign Policy, winter 1997, 126.
"Dances with Wolves: The Secret Life of the American Embargo." Economist, 6 April 1998, 14-16.
Ellings, Richard. Embargoes and World Power: Lessons from American Foreign Policy. Boulder, CO: Westview Press, 1985.
Henderson, David R. "Why Our Cuba Policy Is Wrong." Fortune, 13 October 1997, 48.
Kaplowitz, Donna Rich. Anatomy of a Failed Embargo: U.S. Sanctions against Cuba. Boulder, CO: Lynne Rienner, 1998. "Wish You Were Here." New York Times, 4 April 1998, Cl.