Continental System The Continental System or Continental Blockade ( known in French as " Blocus continental " ) was the foreign policy of Napoleon I of France in his struggle against the United Kingdom of Great Britain and Ireland during the Napoleonic Wars . As a response to the naval blockade of the French coasts enacted by the British government on the 16 May 1806 , Napoleon issued the Berlin Decree on the 21 November 1806 , which brought into effect a large - scale embargo against British trade . This embargo ended on April 11 , 1814 after Napoleon ' s first abdication . Background . The United Kingdom was an important force in encouraging and financing alliances against Napoleonic France . In addition , the British government enacted a naval blockade of the French and French - allied coasts , on the 16 May 1806 . Napoleon didn ' t have the resources to attempt an invasion of the United Kingdom or to decisively defeat the Royal Navy at sea . Napoleon resorted instead to economic warfare . As a result of the Industrial Revolution , Great Britain was emerging as Europe ' s manufacturing and industrial centre , and Napoleon believed it would be easy to take advantage of an embargo on trade with the European nations under his control , causing inflation and great debt . The Plan . In November 1806 , having recently conquered or allied with every major power on the European continent , Napoleon issued the Berlin Decree forbidding his allies and conquests from trading with the British . The UK responded with the Orders in Council of 1807 issued 11 November 1807 . These forbade French trade with the UK , its allies or neutrals , and instructed the Royal Navy to blockade French and allied ports . Napoleon retaliated with the Milan Decree of 1807 , which declared that all neutral shipping using British ports or paying British tariffs were to be regarded as British and seized . Napoleon ' s plan to defeat Britain was to destroy its ability to trade . As an island nation , trade was the most vital lifeline . Napoleon believed that if he could isolate Britain economically , he would be able to invade the nation after the economic collapse . Napoleon decreed that all commerce ships wishing to do business in Europe must first stop at a French port in order to ensure that there could be no trade with Britain . He also ordered all European nations and French allies to stop trading with Britain , and he threatened Russia with an invasion if they did not comply as well . Effects of the System . The System had a significant effect on British trade , with British exports falling between 25 % to 55 % compared to pre - 1806 levels . Belgium and Switzerland benefited the most - particularly the industrialized north and east of France , and south of Belgium , which saw significantly increased profits due to the lack of competition from British goods ( particularly textiles , which were produced at a much cheaper cost in Britain ) . Southern France , especially the port cities of Marseille , Bordeaux and La Rochelle , suffered from the reduction in trade . Moreover , the prices of staple foods rose for most of continental Europe . The Dutch economy suffered greatly by the strong reduction of the overseas trading , even though the king Louis Napoleon , brother of emperor Napoleon Bonaparte , only half - heartedly supported the blockade . The embargo encouraged British merchants to seek out new markets aggressively 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 Napoleon ' s chosen rulers of Spain , Westphalia and other German states . Britain , by Orders in Council ( 1807 ) , prohibited its trade partners from trading with France . The British were able to counter the plan by threatening to sink any ship that did not come to a British port or chose to comply with France . This double threat created a difficult time for neutral nations like the United States of America . In response to this prohibition , compounded by the Chesapeake Incident , the U . S . Congress passed the Embargo Act of 1807 and eventually Macon ' s Bill No . 2 . This embargo contributed to the general ill will between the two countries ( Britain and the U . S . ) , and together with the issue of the impressment of foreign seamen , eventually led to armed conflict between the U . S . and the UK in the War of 1812 . The embargo also had an effect on France itself . Ship building , and its trades such as rope - making declined , as did many other industries that relied on overseas markets , e . g . the linen industries . With few exports and a loss of profits , many industries were closed down . Portugal openly refused to join the Continental System . In 1793 , after the French declaration of war against the United Kingdom , Portugal signed with the UK a treaty of mutual help . After the Treaty of Tilsit of July 1807 , Napoleon attempted to capture the Portuguese Fleet and the House of Braganza , and to occupy the Portuguese ports . He failed . King John VI of Portugal took his fleet and transferred the Portuguese Court to Brazil with a Royal Navy escort . The Portuguese population rose in revolt against the French invaders , the British Army under Arthur Wellesley , 1st Duke of Wellington intervened , and the Peninsular War began in 1808 . Napoleon also forced the Spanish royal family to resign their throne in favor of Napoleon ' s brother , Joseph . Sweden , Britain ' s ally in the Third Coalition , refused to comply with French demands and was invaded by Russia in February 1808 . Also , Russia chafed under the embargo , and in 1810 reopened trade with the UK . Russia ' s withdrawal from the system was the main incentive for Napoleon to force a decision to invade in 1812 , which was the turning point of the war .