With all of the talk of the international community placing sanctions against North Korea (and other nations in the past) it got me thinking about role reversal and America being dealt with the same way.
What would happen if other countries got together and decided to do the same to the United States?
I am looking for factual answers if possible. Moderator, if you feel this needs to go to IMHO, I understand.
You can assume what you want when it comes to the sanctions (no imports, exports, food / non-food) in order to give good examples of the ‘what-if’.
Which I knew but forgot to mention and create a pretend situation as others do in their ‘what-if’ scenarios. Let’s assume it was less formal, more or less other nations just got together and said “let’s show those bastards in the U.S. that they are nothing without the world”. I know it would hurt them also as we export a lot of stuff. But if these nations, to include all countries in Asia (electronics, cars, widgets), the middle east (oil) and so on.
The other countries would have to have massive willpower and be willing to undergo tremendous suffering themselves. The U.S. uses about 25% of the world’s energy and much of that is imported. Various energy markets would collapse. China’s growth would be halted and likely reversed causing an even bigger ripple effect in the global economy. Rinse and repeat. This type of thing would almost certainly cause a collapse of the global economy and lead to a worldwide depression. The buying power of the U.S. is just too large. Halting export capability would lead to major world-wide hurt in the high-tech sectors that have led to the world we live in.
Back at home, the U.S. economy would collapse as well when the supply of cheap goods and oil dry up. The U.S. could technically be self-sustaining for a while in terms of essential goods and commodities (we have enough food for example) but our manufacturing capabilities are a fraction of what they once were and it would take a really long time to get them running again.
It would hurt the economy of other countries in the long term. But it would hurt the economy of the United States worse and quicker.
The biggest factor would probably be oil. Despite some claims, the United States does not, and is not capable of, producing anything close to the oil it consumes. And a major reduction in oil supplies would have an impact throughout the economy.
dalej42’s link is a good starting point. We (Americans) probably won’t see the same sort of rationing, long lines, outtages as we did with oil. Our economy is much more dynamic and will allow for dollar value rising (or lowering) as needed, as well as other economic factors (e.g. interest rate movement). Also, since we are not as protectionist as we were before, we can better respond to fluctuations and better provide alternatives. As the recent oil rise has shown, we adapted rather easily.
If it’s another product, especially one that is highly commoditized, something that we are protecting, or we can readily absorb economically (though this is highly doubtful), then we will probably see some of economic slowdown as indicated in the wiki article. We’ll probably be able to adjust to it sooner, and it probably won’t be as bad as in the 70’s.
It’s not like other countries can have their economies survive if we’re all of a sudden not a trading partner. Any long standing embargo will most likely cause a worldwide depression. I believe that America can retool their economy and adapt faster, and the rest of the world will take a little longer to recover once the recession bottoms out.
The problem with this scenario is the countries would be even less inclined to pass laws restricting trade. Let’s remember, most of the world is some form of democratically elected government. If there is no formal resolution, how are these countries allowed to police themselves so that no trade goes to America?
Even if there is a formal resolution, it would need to include all countries in the world, under threat of war from the rest of the compliant nations. Again, how feasible is that? But, assuming, what if, any country not formally part of the embargo will undercut the alliance by selling to the US, much like OPEC did to themselves. In one econ class, my professor mused that by trying to monopolize oil, these countries only hurt themselves (similar to one story where two brothers tried to corner the market on silver, but then the US saw that there was shortage and released more, bankrupting the once wealthy brothers).
However, assuming perfect enforcement, the business in the countries that rely heavily on trade to the US in some form or another will also quickly head into the economic depression that the rest of the world will be facing. Who comes out first is the country that can be self-sufficent and flexible. Eventually, these countries will have to trade with the US, or, my guess, suffer famine and depression until an economy can exist where the US no longer existed.