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The short answer is the Jay Treaty, the Treaty of Mortefontaine, and the Embargo Act of 1807. I'll let you look up the particulars, but with war going on between England and France, England was worried that the US would be drawn into the war on France's side, since France had help the US during the Revolution. So Chief Justice John Jay went to London and worked out a treaty that did a number of things, but in it, the US gave England "most favoured nation" trading status, which created a huge economic/trade bond between the US and England, preventing the US from going to war with England on the French side. The treaty effectively made the US neutrals in the European war. However, this upset France, and so a Quasi-War took place between the US and France, from 1798-1800. The Treaty of Mortefontaine ended the Quasi-War and gave each nation "most favoured nation" status for the other. In response to increased hostilities, Jefferson and Congress passed the Embargo Act of 1807, which cut off trade to both England and France, hoping to force them to respect US neutrality. It did not work well, and worked to hurt Jefferson's reputation.

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