The Continental System was a foreign-policy cornerstone of Napoleon I of France in his struggle against the United Kingdom of Great Britain and Ireland. Napoleon was a great general, and could probably have defeated the British had he managed to land an army in England. However, he was quite afraid of the Royal Navy, particularly Horatio Nelson, and never risked a crossing of the English Channel. Napoleon resorted instead to economic warfare. As a result of the Industrial Revolution, the British were emerging as Europe's manufacturing center, and were thus vulnerable to a trade embargo.

The Continental System was just such an embargo. In November 1806, having recently conquered or defeated every major power on the European continent, Napoleon issued the Berlin Decree forbidding them from trading with the British. The embargo failed. Napoleon's exclusively land-based customs enforcers could not stop British smuggling, and British merchants aggressively sought out other markets. On the way by the Orders in Council, Britain forbade the trade with France, a measure that brought to war the nascent United States of America, an unfortunate casualty of the Continental System, leading to the War of 1812.

Portugal was the only European country that resisted the Continental system. Yet, after the Tilsit Treaty of July 1807, Napoleon decided to capture the Portuguese Fleet and the House of Braganza, to occupy the Portuguese ports and to expel the British from Portuguese soil. He acted accordingly but failed in every objective; King John VI fled to Brazil with his fleet after allowing the departure of British merchants; the Portuguese population rose in revolt against the French invaders; Wellington's British Army came and the Peninsular War began in 1808.

In fact, the Continental System caused more collateral damage to the nations of the "Grand Empire" than it did to Britain. Russia in particular chafed under the embargo, and in 1812, that country reopened trade with Britain. Napoleon raised the Grande Armée, a force of well over half a million men from across Europe, and invaded Russia.

War and downfall

The Russian generals, fearful of Napoleon's vast force and legendary skill, retreated towards Moscow. This retreat wasn't as systematic as some have made out and was in reality simply the result of Russians continually running from any engagement with the French. The only conscious employment of scorched earth policy was when the governor of Moscow, Rastopchin, decided to burn the city to force out the French. It was a strategy of last resort, but it exploited two key weaknesses of the Grande Armée. Foreseeing a quick victory, Napoleon had failed to supply warm clothing for his troops. The Russian retreat lasted well into the winter, and the French could not glean enough from the ravaged countryside to support themselves. By the time of the key battles at the end of 1812, Napoleon's army had been reduced to approximately 100,000. The Russians were then able to turn the tide and drive Napoleon back across their border. Revolts sprung up in Prussia and Austria as the frontline advanced through those regions, and Napoleon was finally defeated in 1814.