The Trade War of 1812


Two-hundred years ago this week, America’s worst trade war erupted into America’s worst shooting war.

On June 18, 1812, President James Madison signed a declaration of war against Great Britain. The War of 1812 was on. Despite its name, the conflict would rage for almost three years.

These days, Americans don’t think much about what happened or why. Here’s the first sentence of historian Donald R. Hickey’s definitive book: “The War of 1812 is probably our most obscure war.”

It’s obscure partly because it went so poorly. Who wants to remember martial humiliation? The British burned our national capital, in an event whose infamy ranks alongside the sneak attack at Pearl Harbor and the terrorist strike on the World Trade Center. The United States even tried to invade Canada during the War of 1812, but failed. We’re not supposed to lose anything to Canada, except maybe hockey games!

Then there’s James Lawrence, captain of the U.S.S. Chesapeake. In 1813, he sailed out of Boston, engaged a Royal Navy frigate, and uttered his famous rallying cry: “Don’t give up the ship!”

Now for the rest of the story: Moments after speaking these words, Lawrence died and his sailors did indeed give up the ship.

So it was that kind of a war.

Its beginnings were just as inauspicious. The War of 1812 started out as a trade war, with the United States trying to use commerce as a weapon, forcing Great Britain and France to respect American neutrality.

In 1806, we banned a list of British manufactured goods from our markets. The next year, we passed the draconian Embargo Act, which prohibited American ships from traveling to foreign ports. These moves were supposed to hurt the economies of Great Britain and France. Yet they devastated our own, while causing only minor inconveniences to our rivals.

The Embargo Act lasted about 15 months, but the reckless experiment with trade war continued: In 1809, Congress passed the Non-Intercourse Act, which allowed American ships to travel abroad, except to Great Britain, France, or their colonies. It was another disaster. In 1811, the government banned all imports from Great Britain and France.

Supporters of these measures thought that a trade war presented a good alternative to a shooting war. Yet their aggressive protectionism worsened relations between the United States and Europe. Rather than preventing a war, trade restrictions helped launch one.

It just goes to show that nobody wins a trade war.

We should remember this in 2012, as we approach Election Day. In the months ahead, expect to hear a lot of tough talk from both Democrats and Republicans, especially on trade with China. There will be calls for limiting imports, demands for federal contractors to “buy American,” and so on.

It’s hard to believe these policies would spark a hot war with China, but the world is full of surprises. The first foreign-policy crisis of George W. Bush’s presidency involved a mid-air collision between a naval intelligence aircraft and a Chinese jet, forcing the American crew to make an emergency landing on Hainan Island, where they were detained.

A year from now, a new president could face a similar confrontation, perhaps involving a political or military crisis over oil-drilling rights in the South China Sea. It’s impossible to plan for every possibility–but it’s also essential to avoid creating the conditions that can lead to a fiasco.

This is what American leaders failed to do in the run up to the War of 1812.

In fairness, the United States had a few proud moments in the struggle. Oliver Hazard Perry won the Battle of Lake Erie. Andrew Jackson prevailed at New Orleans. And after watching the botched British bombardment of Baltimore, Francis Scott Key penned our national anthem, “The Star-Spangled Banner.”

Yet if we’re going to learn anything from history–and isn’t that the point of studying it?–then we should recognize what may be the most important lesson for the War of 1812’s bicentennial.

We should make trade, not war.

Reg Clause owns a 4th generation family farm near his home in Jefferson, Iowa.  His next generation grows corn, soybeans and cattle and the 6th generation is there too.  Reg volunteers as a board member for Truth About Trade & Technology.


Reg Clause

Reg Clause

Reg Clause is the fourth generation to manage the Clause Family Farm Jefferson, Iowa. The operation raises corn, soybeans, cattle and grandkids.

Reg volunteers as a board member for the Global Farmer Network and is currently serving as Chairman. Reg has extensive experience in business consulting, specializing in business development including feasibility studies, business planning and financial structuring for clients as diverse as biofuels, wineries, meat processing, niche marketing and many more. His work has allowed him to travel extensively around the world to conduct in-depth analysis of agricultural production systems.

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