The Embargo Act of 1807 was an attempt by President Thomas Jefferson and the U.S. Congress to prohibit American ships from trading in foreign ports. It was intended to punish Britain and France for interfering with American trade while the two major European powers were at war with each other.
The embargo was precipitated primarily by Napoleon Bonaparte's 1806 Berlin Decree, which announced that neutral ships carrying British-made goods were subject to seizure by France, thus exposing American ships to attacks by privateers. Then, a year later, sailors from the USS Chesapeake were forced into service by officers from the British ship HMS Leopard. That was the final straw. Congress passed the Embargo Act in December 1807 and Jefferson signed it into law on December 22, 1807.
The president hoped that the act would prevent a war between the United States and Britain. At the same time, Jefferson saw it as a way to keep ships as military resources out of harm's way, buy time for the preservation, and signify (after the Chesapeake event) that the U.S. recognized that a war was in the future. Jefferson also saw it as a way to cease non-productive war-profiteering which was undermining the coveted but never achieved goal of American autarky—economic independence from Britain and other economies.
Perhaps inevitably, the Embargo Act was also a precursor to the War of 1812.
Effects of the Embargo
Economically, the embargo devastated American shipping exports and cost the American economy about 8 percent in decreased gross national product in 1807. With the embargo in place, American exports declined by 75%, and imports declined by 50%—the act did not completely eliminate trade and domestic partners. Before the embargo, exports to the United States reached $108 million. One year later, they were just over $22 million.
Yet Britain and France, locked in the Napoleonic Wars, were not greatly damaged by the loss of trade with Americans. So the embargo intended to punish Europe's greatest powers instead negatively impacted ordinary Americans.
Although the western states in the Union were relatively unaffected, as they had at that point little to trade, other parts of the country were hit hard. Cotton growers in the South lost their British market entirely. Merchants in New England were the hardest hit. In fact, discontent was so widespread there that there was serious talk by local political leaders of seceding from the Union, decades before the Nullification Crisis or the Civil War.
Jefferson's Presidency
Another result of the embargo was that smuggling increased across the border with Canada, and smuggling by ship also became prevalent. So the law was both ineffective and difficult to enforce. Many of those weaknesses were addressed by a number of amendments and new acts written by Jefferson's Secretary of the Treasury Albert Gallatin (1769–1849), passed by Congress, and signed into law by the president: but the president himself essentially ceased active support on his own after signaling his decision to not seek a third term in office in December 1807.
Not only would the embargo taint Jefferson's presidency, making him fairly unpopular by its end, but the economic effects also didn't fully reverse themselves until the end of the War of 1812.
End of the Embargo
The embargo was repealed by Congress early in 1809, just days before the end of Jefferson's presidency. It was replaced by a less restrictive piece of legislation, the Non-Intercourse Act, which prohibited trade with Britain and France.
The newer law was no more successful than the Embargo Act had been, and relations with Britain continued to fray until, three years later, President James Madison obtained a declaration of war from Congress and the War of 1812 began.
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