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During the 1850s and the American Civil War, Cotton diplomacy was the idea that Britain and France required cotton from the South; South Carolina exclaimed, "Cotton is King!" (See King Cotton). However, the Confederate States of America significantly overestimated the leverage that the cotton trade would give them. A large part of Britain's food imports came from the United States; a war with the U.S. would cause starvation in Britain and would risk American attacks on the entire British merchant fleet.Template:Vague Britain did not need Southern cotton in 1861 because it held a huge supply in its warehouses. During the war it bought cotton from the U.S. and developed new cotton sources in India and Egypt.

The decision made spontaneously by Southerners in 1861 (not by their government) to hold cotton off the market was a huge blunder. Cotton that could have been shipped out and sold before the imposition of the Union blockade never moved out. This tactic is known as a self-embargo, also used by President Jefferson in his Embargo Act of 1807, was similarly unsuccessful during the Napoleonic wars in Europe. Economic ties between the CSA and Britain were evident in the Trent Affair as well as in Britain's willingness to build and sell ships to the Confederacy.


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