The Embargo Act

France and Britain are at still at war… But America has a policy of Neutrality… For their own gain, each side will begin to hinder American Trade

The French Block Trade To keep his enemies from supplies, Napoleon blocks their ports by forbidding any nation to trade with Britain.

The British Retaliate The British respond by banning any form of neutral trade with France or its allies.

It’s a no win situation… Ships that violate either the French or British blockades would be seized. American merchant ships are harassed at sea and the neutral United States faces losses from trading with either country.

Military or Economic Warfare? Jefferson is in a bad position… how do we protect America’s needs without resorting to war?.

Embargo: a legal prohibition on trade To pressure France and Britain to respect neutral rights and to demonstrate the value of trade with the U.S., Jefferson and the Congress respond with an embargo instead of open warfare. All U.S. ports are closed to export shipping with both U.S. or foreign vessels, and restrictions were placed on imports from Britain. What do you think this will do?

Economic Effects By confining U.S. ships to their ports, the embargo seriously threatened American livelihood. The act was a hardship on U.S. farmers as well as on New England and New York shipping and merchant industry.

To get around the law, hundreds of ships sailed before the Embargo Act was enforced. Other later found and used legal loopholes to remain in foreign waters and in trade with the warring nations or resorted to smuggling. Governmental efforts to tighten application through the Enforcement Act (1809) only produced more flagrant violations of the law, denunciations of the national government, and outcries of states' rights.

Economic Effects The embargo proved as unsuccessful abroad as it was unpopular at home. Because the British navy had already blockaded the Continental coast, France could not feel the embargo's effect. Imports to England from new Latin American markets offset losses of American grain and cotton. Britain increases its exports to Latin America to match the decrease in British exports to the U.S.

Diplomatic Effects As a diplomatic device, the embargo failed to produce European recognition of neutral rights. It succeeded only in creating severe economic hardships in the U.S., in embarrassing and dividing Jefferson's Republican Party, and in increasing the popularity of his Federalist opponents.

Repeal of the Embargo Act Embargo Act was repealed by the Non- Intercourse Act of March 1, 1809, which reactivated American trade with all countries except Britain and France. The U.S. also agreed to resume trade with the first country to cease violating neutral rights. Neither France nor Britain do so.

The Embargo Act had been a costly mistake. By forfeiting trade, the U.S. had experienced only the economic hazards and none of the potential commercial gains of war. At the same time the embargo had been unable to solve the U.S.’s problem of remaining as a neutral power. The act had little effect in compelling France and Britain to respect America’s position. The Embargo Act divided rather than united Americans. Not surprisingly, the U.S. applied later embargoes to specific goods and not to shipping in general.