10 Policies That Bankrupted Entire Industries
Sometimes, a single government policy or regulation can shake up entire markets. In some cases, those changes weren’t just disruptive, they pushed entire industries to collapse. These policies, often well-meaning or politically driven, left a lasting financial impact few saw coming.
- Tricia Quitales
- 3 min read
Throughout history, policies have had the power to either build or break industries. While some were introduced to improve safety, fairness, or the environment, others had unintended consequences that sent businesses spiraling. From manufacturing to energy and farming, entire sectors folded under the weight of new rules. This article highlights 10 times policy decisions for both domestic and global has led to the downfall of once-thriving industries.
1. The Clean Air Act and Coal Mining (1990 Amendments)
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To reduce pollution, the U.S. strengthened the Clean Air Act, targeting emissions from coal-fired plants. Many energy companies switched to cleaner fuels like natural gas. The policy helped the environment but triggered a slow death for the coal industry.
2. NAFTA and U.S. Textile Manufacturing (1994)
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When NAFTA took effect, it allowed cheaper textile imports from Mexico. U.S. factories couldn’t compete with lower labor costs and began shutting down. Entire towns that depended on textile mills saw massive job losses.
3. Prohibition and Alcohol Industry (1920–1933)
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The 18th Amendment banned alcohol in the U.S., shutting down breweries, distilleries, and bars overnight. Legal producers vanished, while illegal bootlegging thrived. The industry didn’t recover until the law was repealed 13 years later.
4. Ethanol Mandates and Small Oil Refineries (2000s)
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New U.S. rules required fuel to include ethanol, boosting corn farming but hurting smaller oil refineries. Many couldn’t afford the blending equipment or credits needed to comply, so they shut down or sold off assets to survive.
5. Chinese Trade Policies and U.S. Furniture Industry (2000s)
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Massive subsidies and low prices from Chinese manufacturers flooded the U.S. furniture market. Domestic companies couldn’t match the costs and started closing. Policies allowing easy imports helped consumers but devastated local producers.
6. Fishing Quotas and North Atlantic Cod Industry (1992)
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Canada imposed strict fishing limits after cod stocks nearly collapsed. While this saved marine life, it wiped out thousands of jobs in coastal towns, and the once-booming cod industry never fully recovered.
7. European Union Milk Quota Reform (2015)
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The EU ended milk production quotas, hoping to modernize the dairy industry. Instead, prices dropped and small farms across Europe went bankrupt. Larger farms survived, but many family operations disappeared.
8. UK Deregulation of Railways (1990s)
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Privatizing the UK’s railways was meant to improve services and cut costs. Instead, poor coordination and a lack of investment led to multiple failures. Several companies went bust, and the government had to step back in.
9. U.S. Steel Tariffs and Rust Belt Decline (2002)
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Temporary tariffs were introduced to protect American steel, but foreign retaliation and rising costs backfired. Some U.S. industries relying on steel saw prices spike and laid off workers. The policy did little to save steel and hurt others in the process.
10. Banning Asbestos and the Construction Industry (1980s–1990s)
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When governments around the world banned asbestos due to health concerns, it ended decades of demand. Companies that mined or manufactured asbestos products were forced out of business. While it protected public health, it erased an entire sector of the building materials industry.