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.
France, 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 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 1812 reopened trade with the UK. Russia's withdrawal from the system was the main incentive for Napoleon to force a decision to invade, which was the turning point of the war.
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