The embargo was imposed in response to violations of United States neutrality, in which American merchantmen and their cargo were seized as contraband of war by the European navies. The British Royal Navy, in particular, resorted to impressment, forcing thousands of British-American seamen into service on their warships (under British law of the time, having been born British they were still subjects of the Crown). Britain and France, engaged in the Napoleonic Wars, rationalized the plunder of U.S. shipping as incidental to war and necessary for their survival. Americans saw the Chesapeake–Leopard affair as a particularly egregious example of a British violation of American neutrality. Perceived diplomatic insults and unwarranted official orders issued in support of these actions by European powers were argued by some to be grounds for a U.S. declaration of war.
President Thomas Jefferson acted with restraint as these antagonisms mounted, weighing public support for retaliation. He recommended that Congress respond with commercial warfare, rather than with military mobilization. The Embargo Act was signed into law on December 22, 1807. The anticipated effect of this measure—economic hardship for the belligerent nations—was expected to chasten the United Kingdom and France, and force them to end their molestation of American shipping, respect U.S. neutrality, and cease the policy of impressment. The embargo turned out to be impractical as a coercive measure, and was a failure both diplomatically and economically. As implemented, the legislation inflicted devastating burdens on the U.S. economy and the American people.
Widespread evasion of the maritime and inland trade restrictions by American merchants, as well as loopholes in the legislation, greatly reduced the impact of the embargo on the intended targets in Europe. British merchant marine appropriated the lucrative trade routes relinquished by U.S. shippers due to the embargo. Demand for English goods rose in South America, offsetting losses suffered as a result of Non-Importation Acts. The embargo undermined national unity in the U.S., provoking bitter protests, especially in New England commercial centers. The issue vastly increased support for the Federalist Party and led to huge gains in their representation in Congress and in the electoral college in 1808. The embargo had the effect of simultaneously undermining American citizens' faith that their government could execute its own laws fairly, and strengthening the conviction among America's enemies that its republican form of government was inept and ineffectual. At the end of 15 months, the embargo was revoked on March 1, 1809, in the last days of Jefferson's presidency. Tensions with Britain continued to grow, leading to the War of 1812.
After the short truce in 1802–1803 the European wars resumed and continued until the defeat of Napoleon in 1814. The war caused American relations with both Britain and France to deteriorate rapidly. There was grave risk of war with one or the other. With Britain supreme on the sea, and France on the land, the war developed into a struggle of blockade and counterblockade. This commercial war peaked in 1806 and 1807. Britain's Royal Navy shut down most European harbors to American ships unless they first traded through British ports. France declared a paper blockade of Britain (which it lacked a navy to enforce) and seized American ships that obeyed British regulations. The Royal Navy needed large numbers of sailors, and saw the U.S. merchant fleet as a haven for British sailors.
The British system of impressment humiliated and dishonored the U.S. because it was unable to protect its ships and their sailors. This British practice of taking British deserters, and often Americans, from American ships and forcing them into the Royal Navy increased greatly after 1803, and caused bitter anger in the United States.
On June 21, 1807 the American warship USS Chesapeake was attacked and boarded on the high seas off the coast of Norfolk, VA by the British warship HMS Leopard. Three Americans were dead and 18 wounded; the British impressed four seamen with American papers as alleged deserters. The outraged nation demanded action; President Jefferson ordered all British ships out of American waters.