During the war between France and Britain in 1803, America was set on staying neutral. This was economically correct, as American merchants would receive great trade from both France and England. However, Great Britain and France did not take to America trading with both of them, and Britain created a law which forced all neutral ships (American in this case) to either get a trading license, or else be seized by British Vessels. This caused problems throughout America.
England was not bluffing. After the act was passed, Britain would capture over 1000 American vessels. The British would also threaten the rights of Americans by impressment - the act in which captured American sailors were forced into the British naval service. This was due to the fact that the British had the largest Navy, and needed high amounts of people to man the ships. This would happen to a shocking 10,000 American sailors.
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Jefferson was getting annoyed about the actions of the French and British navies. Not wanting a war, Jefferson believed that a trade embargo would help, but this decision would haunt him. Instead of just banning French and British trade, he banned all foreign trade, which destroyed the American economy, and put many sailors, merchants, and farmers, out of business. After he noticed the pandemonium occuring due the the embargo, he immediately opened trade to everybody but France and England.
Jefferson noticed how ineffective it was to ban trade from every nation, as it destroyed the American economy. He swiftly decided to open trade to everybody but France and England (as said before) saving the nation from his own mistake. This would prove to be one of Jefferson's biggest mistakes AND biggest fixes of his presidency.
In conclusion, Jefferson had many problems with foreign affairs. By staying neutral, he angered Britain and France. Unfortunately, his bad decisions hurt the American economy, and lessened the navy. His conflict would also spark the war of 1812. Jefferson made many great and bad decisions that altered American history, for a long time to come.