ABSTRACT
Between 1947 and April 1951 the Truman Administration debated with itself, Congress and allies about a strategic embargo on exports to be directed at the Soviet bloc and later the People’s Republic of China and North Korea. The key question was how extensive the embargo should be in order to reap maximum benefits for the West. Always at the heart of trying to resolve this problem were the economic concept of relative gain from trade and the difficulty of defining a strategic good. During the Korean War the US Commerce Department effectively adopted the position that all goods had strategic value, and therefore advocated a complete embargo, irrespective of the economic consequences for the West. Such a stance flew in the face of the concept of relative gain and was not adopted universally by the USA, though complete US embargos were applied to China and North Korea, where moral, political and ideological considerations were paramount. With the Soviet Union, the USA allowed a small trickle of trade under a tightly limited national regime of trade controls and begrudgingly condoned a more permissive one, governed by multilateral agreement, for allied trade with both the Soviet Union and China.
