The Embargo Act, forbidding trade with all foreign countries, is passed by the U.S. Congress, at the urging of President Thomas Jefferson.
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The Embargo Act of 1807 was a general trade embargo on all foreign nations that was enacted by the United States Congress. As a successor or replacement law for the 1806 Non-importation Act and passed as the Napoleonic Wars continued, it represented an escalation of attempts to coerce Britain to stop any impressment of American sailors and to respect American sovereignty and neutrality but also attempted to pressure France and other nations in the pursuit of general diplomatic and economic leverage.
In the first decade of the 19th century, American shipping grew. During the Napoleonic Wars, rival nations Britain and France targeted neutral American shipping as a means to disrupt the trade of the other nation. American merchantmen who were trading with "enemy nations" were seized as contraband of war by European navies. The British Royal Navy had impressed American sailors who had either been British-born or previously serving on British ships, even if they now claimed to be American citizens with American papers. Incidents such as the Chesapeake–Leopard affair outraged Americans.
Congress imposed the embargo in direct response to these events. President Thomas Jefferson acted with restraint, weighed public support for retaliation, and recognized that the United States was militarily far weaker than either Britain or France. He recommended that Congress respond with commercial warfare, a policy that appealed to Jefferson both for being experimental and for foreseeably harming his domestic political opponents more than his allies, whatever its effect on the European belligerents. The 10th Congress was controlled by his allies and agreed to the Act, which was signed into law on December 22, 1807.
The embargo proved to be a complete failure. It failed to improve the American diplomatic position, highlighted American weakness and lack of leverage, significantly (and only) damaged the American economy, and sharply increased domestic political tensions. Both widespread evasion of the embargo and loopholes in the legislation reduced its impact on its targets. British commercial shipping, which already dominated global trade, was successfully adapting to Napoleon's Continental System by pursuing new markets, particularly in the restive Spanish and Portuguese colonies in South America. Thus, British merchants were well-positioned to grow at American expense when the embargo sharply reduced American trade activity.
The embargo undermined American unity by provoking bitter protests, particularly in New England commercial centers. Support for the declining Federalist Party, which intensely opposed Jefferson, temporarily rebounded and drove electoral gains in 1808 (Senate and House). The embargo simultaneously undermined Americans' faith that their government could execute laws fairly and strengthened the European perception that the republican form of government was inept and ineffectual.
Replacement legislation for the ineffective embargo was enacted on March 1, 1809, in the last days of Jefferson's presidency. Tensions with Britain continued to grow and eventually led to the War of 1812.