Britannica Sources used in this answer

Why did Napoleon’s Continental System affect American merchant ships?

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1812, War of — War of 1812 Battle between the frigates HMS *Shannon* and USS *Chesapeake* off Boston during the War of 1812; detail of a lithograph Louis Haghe after by J.C. Schetky.

Napoleon’s Continental System was a blockade designed to destroy British commerce by prohibiting trade between neutral nations and Great Britain. This policy placed American merchant ships in a precarious position, as they faced the threat of seizure by the French if they complied with British regulations or traded with British ports.12

The situation was exacerbated by Britain’s retaliatory Orders in Council, which mandated that neutral vessels trading with French-controlled ports must first stop at a British port to pay duties and obtain a license. Consequently, American ships were caught between two hostile powers:
* French Decrees: Napoleon declared that any ship submitting to British regulations was "denationalized" and subject to capture as a lawful prize.1
* British Regulations: The British seized neutral vessels that failed to comply with their licensing requirements or were suspected of carrying enemy goods.13

Ultimately, this conflict over neutral shipping rights and the resulting economic pressure were primary factors that led to the War of 1812.2