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The Continental System was the foreign-policy of Napoleon I of France in his struggle against the United Kingdom of Great Britain and Ireland during the Napoleonic Wars.

By 1804, France was the dominant military land force in continental Europe but the British Isles stood outside French control and the United Kingdom was an important force in encouraging and financing resistance to France. Napoleon lacked the resources to attempt an invasion.

The Continental System was such an embargo. In November 1806, having recently conquered or allied with every major power on the European continent, Napoleon issued the Berlin Decree forbidding his allies and conquests from trading with the British. In 1807 he tightened his grip and, in an effort to destroy the commerce of the United Kingdom, issued the Milan Decree.

Ultimately the embargo failed. Its effect on the United Kingdom and on British trade is uncertain, but thought to be much less harmful than on the continental European states - although food imports in Britain dropped, and the price of staple foods rose. The continental European states needed the British goods, and Napoleon had put in place internal tariffs, all favoring France and hurting the other nations. The embargo encouraged British merchants to aggressively seek out new markets 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, who faced severe shortages of goods from the French colonies. The British, by Orders in Council (1807), prohibited her trade partners from trading with France. In response the United States Congress passed the Embargo Act of 1807. This embargo contributed to the general ill will between the two countries (Britain and the USA) and, together with the issue of the impressment of foreign seamen, eventually led to armed conflict between the United States and the United Kingdom in the War of 1812.

Portugal openly refused to join the Continental System. After the Treaty of Tilsit of July 1807, Napoleon attempted to capture the Portuguese Fleet and the House of Braganza, to occupy the Portuguese ports and to expel the British from Portuguese soil, and failed. King John VI of Portugal took his fleet and fled 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.

Sweden, Britain's ally in the Third Coalition refused to comply with French demands and was invaded by Russia in February 1808.

In fact, the Continental System caused more collateral damage to the nations of the "Grand Empire" than it did to the United Kingdom. Russia in particular chafed under the embargo, and in 1812, that country reopened trade with the United Kingdom.

• Anglo-Russian War (1807-1812)

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