Embargo

Reviewed by Vineeth | Updated on Aug 27, 2020

Introduction

An embargo is a government mandate, which will restrict the trade and commercial activities with a particular country or trading of particular goods. An embargo is ruled out when there is a disconnect between the two nations due to several political and economic rifts.

An embargo is imposed in order to quarantine a country to create challenges for its governing bodies, while it will eventually force the nation to look into the issue which led a country to impose an embargo on it.

Understanding Embargo

An embargo is an extremely powerful instrument which has the potential to affect a country both in terms of political and economic aspects. The capability of trading goods across the world is important for a nation to optimise its economic prosperity. When a country is imposed with an embargo, it no longer will be able to utilise its economic resources fully and can have significant adverse effects.

The decisions of the embargo and other similar restrictions made by the United States of America (USA) are on the basis of the mandate by the United Nations (UN). It is an organisation which was formed in the year 1945. UN’s main objective is to increase economic and political cooperation.

Countries that have formed an ally will generally have a common restriction on particular countries. Embargos are generally levied in order to decrease the possible threats to peace around the world. Imposing an embargo does not essentially apply the movement of all goods. Generally, specific items, such as oil and military equipment, are embargoed.

Acts Guiding Embargo

The United States’ President has the power to levy embargo and other similar restrictions on a country at times of war as per the ‘Trading with Enemy’ Act. The International Emergency Economic Powers Act is another act which gives the US president the power to impose an embargo on particular countries at times of national emergencies.