Continental System

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The Continental System was a foreign-policy cornerstone of Napoleon I of France in his struggle against the United Kingdom of Great Britain and Ireland during the Napoleonic Wars. By 1804, France was the dominant military force in continental Europe, however Britain stood outside French control and was an important force in encouraging and financing resistance to France. Napoleon lacked the resources to attempt an invasion of Britain or to defeat the Royal Navy at sea. His one attempt to do so ended with defeat at the Battle of Trafalgar in 1805. Napoleon resorted instead to economic warfare. As a result of the Industrial Revolution, the British were emerging as Europe's manufacturing center, and Napoleon believed they would be vulnerable to embargo on trade with the European nations under his control.

The Continental System was just such an embargo. In November 1806, having recently conquered or allied with every major power in European continent, Napoleon issued the Berlin Decree forbidding his allies and conquests from trading with the British. In 1807 he tightened his grip and in an effort to destroy the commerce of England issued the Milan Decree.

Ultimately the embargo failed. Its effect on Great Britain and on British trade is uncertain, but thought to be much less harmful than on the continental European states, although the embago encouraged British merchants to aggressively seek out new markets and to engage in smuggling with continental Europe. Napoleon's exclusively land-based customs enforcers could not stop British smugglers, especially as these operated with the connivance of Napoleons chosen rulers of Spain, Westphalia and other German states, who faced severe shortages of goods from the French colonies. The British, by Orders in Council (1807), prohibited her trade partners from trading with France. In response the United States Congress passed the Embargo Act of 1807. This contributed to the general ill will between the two countries and, together with the issue of the impressment of foreign seamen, eventually led to armed conflict between the United States and Britain in the War of 1812.

Portugal was the only European country that openly refused to join the Continental system. After the Tilsit Treaty of July 1807, Napoleon attempted to capture the Portuguese Fleet and the House of Braganza, to occupy the Portuguese ports and to expel the British from Portuguese soil, and failed. King John VI of Portugal took his fleet and fled to Brazil with a Royal Navy escort. The Portuguese population rose in revolt against the French invaders, Wellington's British Army intervened and the Peninsular War began in 1808.

In fact, the Continental System caused more collateral damage to the nations of the "Grand Empire" than it did to Britain. Russia in particular chafed under the embargo, and in 1812, that country reopened trade with Britain.

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