What is an Embargo?
An embargo is a government-instituted prevention of exports to a certain country.
In the media world, an embargo is the release of information with the condition that it cannot be published or disseminated before a certain date. Companies often embargo press releases, meaning that they disseminate them to the media with the condition that the media not report the story until after a certain date.
How Does an Embargo Work?
Let's say Country A dislikes Country B's human rights policies. In order to coerce Country B to change its ways, Country A forbids its companies from selling widgets to Country B. Country B has a huge demand for widgets, and being "cut off" from Country A's widgets could encourage Country B's citizens to demand that Country B's government change its ways.
In many cases, a group of countriesjoin an embargo so that a country like Country B can't just start buying widgets elsewhere. Sometimes countries embargo all products with other countries.
The Magna Carta is one of the world's first and most famous embargoes. Another famous embargo is the one between the U.S. and Cuba, which has not received most American goods for 50 years.
Why Does an Embargo Matter?
Embargoes are political strategies. Economies are increasingly global, which makes them even more powerful when they involve countries that rely on imports for day-to-day needs.
Critics point out that a country's choice not to join the World Trade Organization (WTO) may effectively place an embargo on the goods and services of that country, because WTO members often trade only with each other or give preferential treatment to other WTO members.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
The cost of tuition has skyrocketed in the last 30 years. According to Bloomberg, college tuition fees have jumped more than 13-fold since...Read More →