The neutrality of the United States was tested during the Napoleonic Wars. Both Britain and France imposed trade restrictions in order to weaken each others' economies. This also had the effect of disrupting American trade and testing the United States' neutrality. As time went on, harassment by the British of American ships increased. This included impressment and seizures of American men and goods. After the Chesapeake Affair, Thomas Jefferson was faced with a decision to make regarding the situation at hand. In the end, he chose an economic option: the Embargo Act of 1807.
"On the impressment of our seamen, our remonstrances have never been intermitted. A hope existed at one moment, of an arrangement which might have been submitted to, but it soon passed away, and the practice, though relaxed at times in the distance seas, has been constantly pursued in those in our neighbourhood." -Th:Jefferson
Although not restricted to the time period of the Jefferson and Madison administrations, the impressment of American sailors became a key issue for the United States especially during the Napoleonic Wars (1803-1815). After witnessing the horrors of war with France, many British sailors deserted Her Majesty's navy and enlisted in the American merchant marines. In order to retrieve the deserters, British "press gangs" came aboard American ships. However, the British tended to take anyone who could pass as a British solider - unless the sailor could prove their American citizenship. Approximately 1,000, out of the estimated 10,000 men taken from American ships, were proven to have British citizenship.
In January of 1806, Secretary of State James Madison delivered a report to the United States Congress concerning the harassment of American ships. This report gave rise to great deal of anti-British sentiment. James Monroe and William Pinkney, Ministers to Britain, were sent to Britain in order to represent the United States. These negotiations resulted in the unsuccessful Monroe-Pinkney Treaty. In a letter to James Monroe, James Madison illustrated the situation:
"We consider a neutral flag, on the high seas, as a safeguard to those sailing under it. Great Britain, on the contrary, asserts a right to search for, and seize, her own subjects; and under that cover, as cannot happen, are often seized and taken off, citizens of the United States and citizens or subjects of other neutral countries, navigating the high seas, under the protection of the American flag."
Impressment became an even greater concern for Jefferson's administration after the Chesapeake-Leopard affair in June of 1807. Eventually, the actions of the British led to the Embargo Act of 1807.
Jefferson gave a speech, shortly after Madison's, to Congress on February 14, 1806, which read:
"Resolved, that the capture and condemnation under the orders of the British government, and adjudications of their courts of Admiralty, of American vessels and their cargoes, on the pretext of their being employed in a trade with the enemies of Great Britain, prohibited in time of peace, is an unprovoked aggression upon the property of the citizens of these United States, a violation of their neutral rights, and an encroachment upon their national independence."
With this in mind, the United States Congress passed the Non-Importation Acts on April 18, 1806. Great Britain could no longer import specific manufactured goods to the United States. The author of the resolution, Joseph A. Nicholson, a Congressman from Maryland, created a list of items the United States could produce on their own. The items on the list were those that Americans would no longer import from Great Britain. As a whole, Jefferson was pleased with the result. In a letter to James Monroe, Jefferson said that the House of the Representatives had never been "more solidly united in what they believed to be the best for the public good." Unfortunately, the acts were not enacted on the date originally intended, November 15, 1806. The date was postponed in order to wait for the results of negotiations in Great Britain.
In 1806, James Monroe and William Pinkney were asked by President Jefferson to negotiate with Great Britain in hopes of ending the harassment of American ships and seamen. After months of negotiations, the treaty was finalized and "defined neutral and belligerent rights in time of war and established terms of trade between the United States and the British Empire." However, what it did not include were clauses concerning the impressment of United States citizens, which bothered Jefferson. Jefferson and his advisers agreed before the treaty was received that if the treaty did not include clauses to stop the impressment of Americans, they would not forward it to Congress for ratification. In a letter to James Monroe, defending his actions, Jefferson wrote:
"We immediately stated in conversation, to the members of the Legislature & others, that having, by a letter received in January, perceived that our ministers might sign a treaty not providing satisfactorily against the impressment of our seamen, we had, on the 3d of Feb., informed you, that should such one have been forwarded, it could not be ratified, & recommending, therefore, that you should resume negociations for inserting an article to that effect; that we should hold the treaty in suspense until we could learn from you the result of our instructions, which probably would not be till summer, & then decide on the question of calling the Senate". 
Opponents of Jefferson later criticized his actions. An article in early 1812 in the Alexandria Gazette stated, "...the rejection of that treaty, the responsibility of which act Mr. Jefferson has boldly taken to himself, has been the fruitful source of all the evils, which we have suffered from embargoes and non-importation acts, and may soon suffer from war."
The Chesapeake Affair
As time went on, the tension between Britain and the United States grew. Some British deserters reportedly joined the ranks of the U.S.S. Chesapeake. In February of 1807, it was reported that three men aboard the H.M.S Melampus escaped and joined the American ship. The British Council asked for the return of the men, but the request was denied. An investigation was conducted by Madison and in the end, the Secretary of the Navy reported that the three men in question were American citizens. Both John Strahan (or Stachan) and William Ware were from Maryland, while Daniel Martin was a resident of Massachusetts. According to the report, these three men had been impressed earlier; therefore, they were not considered deserters. In the mean time, the British Vice Admiral, George Cranfield, issued an order to captains and commanders of all British ships along the American coast. The order stated that many British subjects had deserted and were now on board the U.S.S. Chesapeake. Therefore, if any ships should meet the Chesapeake, the captains should be shown the order and the ship should be searched for British deserters.
On board the Chesapeake, Captain James Barron was preparing to sail to the Mediterranean. On June 22, 1807, the Chesapeake and the H.M.S. Leopard crossed paths. The Chesapeake halted along side the Leopard in order to allow the British messenger on board. The messenger recited the proclamation given to him by his superiors. Captain Barron refused to allow the British to search his ship. The captain made it clear that there were no such men aboard the ship. Shortly after, the Leopard fired upon the Chesapeake in retaliation. Approximately 20 minutes later, the American ship surrendered to the British demands. On board the Chesapeake, the British looked at the muster and took the three men in question off the ship, in addition to John Wilson (aka, Jenkin Ratford), who was a proven deserter. In the end, in addition to the four men taken off the ship, three seamen were killed, eight were seriously injured and ten more sustained non-life-threatening injuries.
American sovereignty was clearly violated by the British; they used force, fired upon the American flag and destroyed American life and property. In his seventh annual message, Jefferson said, "These aggravations necessarily lead to the policy either of never admitting an armed vessel into our harbors, or of maintaining in every harbor such an armed force as may constrain obedience to the laws, and protect the lives and property of our citizens, against their armed guests."  There was no question that the American public was outraged by the actions of Britain, and Jefferson and his cabinet now needed to find a reasonable solution.
As the news spread regarding the incident, so did anti-British sentiment. Jefferson stated that, "This country has never been in such a state of excitement since the Battle of Lexington."  In order to immediately address the issue, the Virginia militia was ordered to capture the British ship. After the ship was captured, as a sign of good will, Jefferson allowed the British sailors to return to Britain and called for his cabinet in order to discuss the issue. 
However, Jefferson did not convene Congress. There were several reasons for this. The first was that he wanted tempers to cool and to wait for a response and apology from the British government. Secondly, Jefferson wanted to provide ample time for the military to prepare in case of a possible armed conflict, and give the ships outside of American waters time to return. Finally, he did not wish to reconvene Congress because he feared it would automatically be interpreted as a call to war. Jefferson later ordered the British ships to leave American waters, saying, "If they come ashore, they must be captured, or destroyed if they cannot be captured, because we mean to enforce the proclamation rigorously..."
Embargo of 1807
Shortly after the Chesapeake Affair, Thomas Jefferson received a letter from his friend John Page in Richmond on July 12, 1807 which read, "...an immediate embargo is necessary-€¦in order to retrieve our lost honor & to bring the mad King to his senses-€¦" Although Jefferson was not fully opposed to the embargo, he wanted to allow ample time for American naval ships to return stateside. Impressment was continuing and the British showed no sign of wanting to improve relations between the two nations. James Madison updated the United States Congress on February 29, 1808 saying, "From the returns in the office it would appear that four thousand twenty-eight American seamen had been impressed into British service since the commencement of the war, and nine hundred thirty-six of this number had been discharged, leaving in that service three thousand two hundred and ninety-two."
On December 15, 1807, Jefferson called his cabinet members to discuss the next phase of reconciliation. Shortly after, the President had received news from Europe that did not rule in favor of a settlement. In fact, England released a royal proclamation that promised more impressments. In addition to this, Napoleon had the full intention of applying the Berlin Decree, an act created in response to a British blockade on France, to United States shipping.  The situation in Europe showed no signs of improvement. The Jefferson administration needed to respond.
As December 1807 began, debate about an embargo was heating up in Congress. Two key figures against the measure were Massachusetts Governor James Sullivan and Secretary of the Treasury Albert Gallatin. Sullivan's constituents would be greatly affected by the measure as most of the United States' commercial shipping was located in his state. Gallatin faced the problem of enforcing the measure.  Gallatin suggested amending the present Non-Importation Act instead of imposing a full embargo. In a letter to Jefferson, Gallatin argued, "In every point of view, privation, suffering, revenue, effect on the enemy, politics at home, I prefer war to a permanent embargo."  However, Jefferson was unmoved by the arguments against the embargo, and failed to see the benefits of a restrictive economic policy like the Non-Importation Acts. He delivered the following remarks before Congress on December 18, 1807:
"To the Senate and House of Representatives of the United States: The communications now made, showing the great and increasing dangers with which our vessels, our seamen, and merchandise are threatened on the high seas and elsewhere, from the belligerent powers of Europe, and it being of great importance to keep in safety these essential resources, I deem it my duty to recommend the subject to the consideration of Congress, who will doubtless perceive all the advantages which may be expected from an inhibition of the departure of our vessels from the ports of the United States. Their wisdom will also see the necessity of making every preparation for whatever events may grow out of the present crisis." 
It was four days later that the United States Congress passed the Embargo Act of 1807, on December 21, 1807, making the Non-Importation Act obsolete.
Jefferson continued to support the Embargo Act. He saw it as an alternative to war, and he wanted to keep the United States out of conflict for as long as possible. However, some changes needed to be made. Three such changes were passed in Congress over the course of 1807 and 1808. These acts are called the supplementary, the additional and the enforcement acts.  The supplementary acts, most significantly, required "...bonds from vessels in the coastwise trade, and also from those engaged in fishing and whaling." The additional act, "tightened the system by requiring bonds for foreign vessels engaged in the coastal trade; and, what was more significant, it forbade the exportation of goods of any sort by land as well as by sea." An unfortunate result of the embargo was the rise in the smuggling trade. Port authorities were now allowed to seize cargoes if there was any suspicion of violation of the embargo, and the President was empowered to use the Army or the Navy for additional enforcement.
Repeal of the Embargo/Non-Intercourse Acts
Although it was successful in averting war, news of evasions and other such negative consequences of the Embargo forced Thomas Jefferson and Congress to consider repealing the measure. The American economy was suffering and the American public opinion was not in support of its continuation. Ultimately, the embargo failed to have a significant effect on the British. Goods still reached Great Britain through illegal shipments; British trade was not suffering as much as the framers of the embargo had intended. There was an initial effect on the price of goods in Britain, but the Britons quickly adapted to the altered prices, and supplemented their decreased North American trade with South American commerce. What they could not replace through other trading partners were goods that were not vital to the survival of the country. The other country in question, France, almost seemed to welcome the American embargo because it supported Napoleon's Continental System.
The House Foreign Affairs Committee, which was headed by George Washington Cabell from Tennessee, was in charge of writing a report giving an overview of the United States' relationship with Britain and France, as well as giving suggestions for policies, late in 1808. The committee came up with three different resolutions. The first was to grant "partial repeal with submission." The second was to impose the non-importation acts on France, and the third was to begin military preparations. Jefferson left the decision up to Congress and urged the Congressmen to honor the report given by Cabell's committee.
After a long-winded debate on the subject, the committee reconvened and insisted that the best course of action was the substitution of a non-intercourse act. Through this act, all countries except for Britain and France would be removed from the Embargo. At the same time, French and British ships would be banned from American waters.
Jefferson signed the Non-Intercourse Act on March 1, 1809, three days before he left office.
↑ Message from the President of the United States, respecting the violation of neutral rights, the depredations on the colonial trade, and the impressments of American seamen, Friday, January 17, 1806. Journal of the Senate of the United States of America, vol. 4. Available online at http://memory.loc.gov/ammem/amlaw/lwsj.html.