The Embargo Act of 1807 was a general trade embargo on all foreign nations that was enacted by the United States Congress. Much broader than the ineffectual 1806 Non-importation Act, it represented an escalation of attempts to coerce Britain and France to cease their interference with American merchant shipping as the Napoleonic Wars continued. In the first decade of the 19th century, American shipping grew. During the Napoleonic Wars, British and French authorities seized American merchantmen trading with the other side. American merchantmen bound for trade with "enemy nations" were seized as contraband of war by both European powers. The Royal Navy, angered by thousands of its sailors deserting and finding work on American merchantmen, began stopping US ships and reclaiming alleged deserters. This inflamed American public opinion, which was exacerbated by incidents such as the Chesapeake–Leopard affair.
Congress imposed the embargo in direct response to these events. President Thomas Jefferson weighed public support for retaliation, but recognized that the United States was militarily far weaker than either Britain or France. He recommended Congress respond instead with commercial warfare. The experiment appealed to Jefferson and would harm his Northeastern opponents more than his domestic allies, irrespective of any actual impact on the European belligerents. The 10th Congress, controlled by his allies, agreed to the Act, which was signed into law on December 22, 1807. The Embargo failed to improve the American diplomatic position, and sharply increased international tensions. Both widespread evasion of the embargo and loopholes in the legislation reduced the intended economic impact. 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.
The Act's prohibition on imports protected nascent US domestic industries across the board, particularly the textile industry, marking the beginning of a United States manufacturing system, and reducing the nation's dependence upon imported manufactured goods. Americans opposed to the Act launched 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). In the waning days of Jefferson's presidency, the Non-Intercourse Act lifted all embargoes on American shipping except cargoes bound for Britain or France. Enacted March 1, 1809, that law exacerbated American tensions with Britain, eventually leading to the War of 1812.
After a short truce between the French Revolutionary Wars and the Napoleonic Wars during 1802–1803, the European conflicts resumed and continued until the defeat of Napoleon Bonaparte in 1814. The wars caused American relations with both Britain and France to deteriorate rapidly. There was a high risk of an American war with one nation or the other. With Britain supreme on the sea and France on the land, the war developed into a struggle of blockade and counterblockade. The commercial war peaked in 1806 and 1807. The British government issued the Orders in Council which further restricted American trade with France and its allies. France's government declared a paper blockade of Britain, but lacked a navy that could enforce it, and seized American ships that obeyed British regulations. The Royal Navy needed large numbers of sailors, and was deeply angered by the American merchant fleet being a haven for British deserters.
The Royal Navy began impressing alleged deserters from American merchantmen. This was seen by the American public as a humiliation and led to an uptick in anti-British sentiment in the US. The number of sailors impressed from American ships increased sharply after 1803 in response to the outbreak of the Napoleonic Wars. On June 21, 1807, the USS Chesapeake was boarded on the high seas off the coast of Norfolk, Virginia by HMS Leopard. Chesapeake had been carrying four deserters from the Royal Navy, three of them American and one British. The four deserters, who had been issued American papers, were removed from Chesapeake and taken to Halifax, Nova Scotia, where the lone Briton was hanged. The three Americans were initially sentenced to 500 lashes, though American diplomatic pressure led Britain to return them with no punishment. An outraged American public demanded action, and President Jefferson ordered all British warships out of U.S. waters.
Passed on December 22, 1807, the Act did the following:
An embargo was laid on all ships and vessels under US jurisdiction.
All ships and vessels were prevented from obtaining clearance to undertake in voyages to foreign ports or places.
The US president was allowed to make exceptions for ships under his immediate direction.
The President was authorized to enforce via instructions to revenue officers and the Navy.
It was not constructed to prevent the departure of any foreign ship or vessel, with or without cargo on board,
A bond or surety was required from merchant ships on a voyage between US ports.
Warships were exempted from the embargo provisions.
The shipping embargo was a cumulative addition to the Non-importation Act of 1806 (2 Stat. 379), which was a "Prohibition of the Importation of certain Goods and Merchandise from the Kingdom of Great Britain", the prohibited imported goods being defined where their chief value, which consists of leather, silk, hemp or flax, tin or brass, wool, glass, and paper goods, nails, hats, clothing, and beer.
The Embargo Act of 1807 was codified at 2 Stat. 451 and formally titled "An Embargo laid on Ships and Vessels in the Ports and Harbours of the United States". The bill was drafted at the request of President Thomas Jefferson and was passed by the 10th Congress on December 22, 1807, during Session 1; Chapter 5. Congress initially acted to enforce a bill prohibiting only imports, but supplements to the bill eventually banned exports as well.
The embargo had the dual effect of severely curtailing American overseas trade, while forcing industrial concerns to invest new capital into domestic manufacturing in the United States. In commercial New England and the Middle Atlantic, ships sat idle. In agricultural areas, particularly the South, farmers and planters could not sell crops internationally. The scarcity of European goods stimulated American manufacturing, particularly in the North, and textile manufacturers began to make massive investments in cotton mills. However, as Britain was still able to export to America particularly through Canada, that benefit did not immediately compensate for present loss of trade and economic momentum. A 2005 study by the economic historian Douglas Irwin estimates that the embargo cost about 5% of America's 1807 gross national product.
Miniature teapots were manufactured, engraved with slogans intended to bolster flagging popular support for the Embargo Act.
A case study of Rhode Island shows the embargo to have devastated shipping-related industries, wrecked existing markets, and broadened opposition to the Democratic–Republican Party. Much of the U.S. approved of smuggling, holding that the embargo violated their rights. Public outcry helped the Federalists regain control of Rhode Island state government in 1808–1809. The case is a rare example of American national foreign policy altering local patterns of political allegiance.