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 persuade 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.

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.

In terms of diplomacy, the Embargo failed to improve the American diplomatic position, and sharply increased international political tensions.

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.

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 for cargos bound for British or French ports.

France 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 at the American merchant fleet for being a haven for British deserters.

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.

[10] A 2005 study by the economic historian Douglas Irwin estimates that the embargo cost about 5% of America's 1807 gross national product.

[citation needed] A case study of Rhode Island shows the embargo to have devastated shipping-related industries, wrecked existing markets, and caused an increase in opposition to the Democratic–Republican Party.

Despite its unpopular nature, the Embargo Act had some limited unintended benefits to the Northeast, especially by driving capital and labor into New England textile and other manufacturing industries, which lessened America's reliance on British trade.

[12] In Vermont, the embargo was doomed to failure on the Lake Champlain–Richeleiu River water route because of the state's dependence on a Canadian outlet for produce.

Gordinier (2001) examines how the merchants of New London, Connecticut, organized and managed the cargoes purchased and sold and the vessels that were used during the years before, during, and after the embargo.

Trade routes and cargoes, both foreign and domestic, along with the vessel types, and the ways that their ownership and management were organized show the merchants of southeastern Connecticut evinced versatility in the face of crisis.

Huntington was an influential member of the Connecticut leadership class (called "the Standing Order") and allowed scores of embargoed vessels to depart for foreign ports under the guise of "special permission".

[14] Jefferson's Secretary of the Treasury, Albert Gallatin, was against the entire embargo and foresaw correctly the impossibility of enforcing the policy and the negative public reaction.

"As to the hope that it may... induce England to treat us better," wrote Gallatin to Jefferson shortly after the bill had become law, "I think is entirely groundless... government prohibitions do always more mischief than had been calculated; and it is not without much hesitation that a statesman should hazard to regulate the concerns of individuals as if he could do it better than themselves.

As the historian Forrest McDonald wrote, "A loophole had been discovered" in the initial enactment, "namely that coasting vessels, and fishing and whaling boats" had been exempt from the embargo, and they had been circumventing it, primarily via Canada.

With their harbors for the most part unusable in the winter anyway, New England and the northern ports of the mid-Atlantic states had paid little notice to the previous embargo acts.

Federal officials believed parts of Maine, such as Passamaquoddy Bay on the border with the British territory of New Brunswick, were in open rebellion.

The law enabled the President, once the wars of Europe had ended, to declare the country sufficiently safe and to allow foreign trade with certain nations.

[22] The attempts of Jefferson and Madison to secure recognition of American neutrality via peaceful means gained a belated success in June 1812, when Britain finally promised to repeal their 1807 Orders in Council.

America's declaration of war in mid-June 1812 was followed shortly by the Enemy Trade Act of 1812 on July 6, which employed similar restrictions as previous legislation.