Henningsen: Embargo

Apr 2, 2018

President Trump’s recent effort to protect American industry by imposing prohibitive tariffs on Chinese imports isn’t the first time an American president has attempted to translate economic ideology into public policy. And I hope current efforts don’t turn out as poorly as they did then.

That was during the presidency of Thomas Jefferson, when a neutral US struggled to trade equally with Britain and France, who were locked in seemingly endless war. Neither country took kindly to American efforts to trade with the other and both took strong preventive action: confiscating ships and cargoes and, in Britain’s case, seizing American sailors to serve in the depleted Royal Navy.

Jefferson knew the U.S. shouldn’t get involved in a European war and believed that economic sanctions would persuade Britain and France to leave American commerce alone. In December of 1807, he successfully lobbied Congress to pass an Embargo Act, forbidding the export of American products to any foreign nation.

The words of eminent American historian Gordon Wood deserve quoting in full here: “Perhaps never in history has a trading nation of America’s size engaged in such an act of self-immolation with so little reward.”

Today, it’s difficult to know which to fault more: Jefferson’s complete misunderstanding of America’s economic position in the world or the terms of the embargo itself. The President believed that Britain and France depended on American products and that economic sanctions would force them to cave in to his demands. In fact, both nations could – and did - get along just fine without American goods. Moreover, the law barred exports but left foreign imports largely alone, permitting European nations to continue marketing their products in America. Both philosophy and policy were self-inflicted wounds.

American exports declined almost 80%; New England seaports collapsed; and, led by Vermont, smuggling into Canada reached an all-time high. Although the Embargo was repealed within eighteen months, it did incalculable damage to the American economy, fueled political unrest throughout the nation, and contributed to America’s eventually going to war with Britain in 1812.

Perhaps the best indication of Vermont’s lack of enthusiasm for the whole thing also came in 1812, when the citizens of what was then known as Jefferson County finally chose to rename it Washington.