Far more serious in its impact on the United States was warfare between Britain and France, which resumed in 1803 after a brief lull. According to international law, neutral nations had a right to trade nonmilitary goods with countries at war. By 1806, however, each combatant had declared the other under blockade, seeking to deny trade with America to its rival. The Royal Navy resumed the practice of impressment. By the end of 1807, it had seized more than 6,000 American sailors (claiming they were British citizens and deserters), including men from the U.S. warship Chesapeake, which the British frigate Leopard bombarded and boarded in American waters off the coast of Maryland.

To Jefferson, the economic health of the United States required freedom of trade with which no foreign government had a right to interfere. American farmers needed access to markets in Europe and the Caribbean. As colonial patriots had done in the 1760s and 1770s, he decided to use trade as weapon. In December 1807, he persuaded Congress to enact the Embargo, a ban on all American vessels sailing for foreign ports. For a believer in limited government, this was an amazing exercise of federal power.

Enforcement of the Embargo brought back memories of the Intolerable Acts of 1774, with the navy sealing off ports and seizing goods without warrants and the army arresting accused smugglers. Jefferson hoped it would lead Europeans to stop their interference with American shipping and also reduce the occasion for impressment. In 1808, American exports plummeted by 80 percent. Unfortunately, neither Britain nor France, locked in a death struggle, took much notice. But the Embargo devastated the economies of American port cities. Just before his term ended, in March 1809, Jefferson signed the Non-Intercourse Act, banning trade only with Britain and France but providing that if either side rescinded its edicts against American shipping, commerce with that country would resume.

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