5 TRADE WARS IN HISTORY

As a trade war develops between the US and China, we look back at five key commercial conflicts that shaped the modern world.

Fireworks explode over tallships as they re-enact the battle of Trafalgar in the Solent off the coast of Portsmouth. REUTERS/Russell Boyce


The history of trade since the Age of Exploration has been all but inseparable from trade wars, most of which fast turned bloody. As a trade war unfolds between the US and China, it is worth taking a look at how the most important of these have played out since the 16th century.

Portuguese-Mamluk War and the Battle of Diu (1509)

While many see the Ottoman conquest of Constantinople in 1453 as the pivotal turning point in the commercial and political history of the late Middle Ages, it is often forgotten that their conquest of the eastern Mediterranean forced Western European powers to seek new routes to the Spice Islands of the East Indies by sailing around the southern tip of Africa.

Within barely two decades of passing by the Cape of Good Hope, the Portuguese were aggressively establishing a mercantile trade empire in the Indian Ocean. In a bid to dislodge the mostly Muslim and Arab merchants and Venetian middlemen that controlled the trade routes from China and India to the Middle East and Europe, the Portuguese were soon at war with the Mamluks.

The Mamluk Sultanate controlled a vast merchant empire from Cairo, along with their Muslim northern Indian allies, the Gujarat Sultanate.

Matters came to a head at the Battle of Diu in 1509, where an alliance of Mamluks, Gujaratis, and Calicuttis tried to thwart the Portuguese advance along the northwest Indian coast (250km from modern-day Mumbai). The ensuing Portuguese victory not only gave the small Atlantic kingdom perpetual control of a key Indian Ocean port, but ensured their nascent empire a dominant position in the regional spice and silk trade for nearly five centuries.

The Mamluks, mortally weakened by the loss of their Indian Ocean revenues, would capitulate to the Ottomans eight years later (1517), consolidating Istanbul's control of Egypt and Arabia until the early 20th century.

England versus Portugal: the Battle of Swally (1612)

Less than 100km from Diu in the Gulf of Khambhat, due north of Mumbai, the British East India Company took its first stab at the Portuguese empire in India at the Battle of Swally in 1612.

Then a chief Mughal port under the rule of Emperor Jahangir, the British entered the town of Surat, near whose shores lay the village of Suvali (Swally), in an attempt to establish friendly trade ties with the local Mughal potentate.

Resentful of Portuguese control of naval routes to the Muslim holy lands, the Mughals were eager to entertain British overtures.

The Portuguese sent out four galleons to counter the move, but were repelled by Captain Thomas Best.

The Mughals granted the British the right to trade and establish factories in their realm in exchange for acting as their naval auxiliaries.

Ultimately, the British victory at the Battle of Swally determined that India, rather than the “Far East," should form the locus of their Asian empire for the next three and a half centuries.

Dutch-Portuguese Sugar Wars

Though the Dutch War of Independence (1568-1648) from Habsburg Spain was still raging, they, like the British, were still keen on chipping away at Portuguese commercial hegemony in the East Indies.

And since the Portuguese were then aligned with the Spanish under the Iberian Union (1580-1640), to strike at one—the Portuguese in the East and West Indies—was to strike at the other: Habsburg Spain.

For this reason the Republic of the Seven United Netherlands chartered the Dutch West India Company (WIC) to eliminate Spanish and Portuguese competition in the Americas and establish preeminence in the sugar and slave trades.

Though successful in wresting Malacca (near modern-day Singapore), Ceylon (Sri Lanka), the Malabar coast (Goa and Kerala), and the Spice Islands of the Moluccas (Indonesia), Dutch attempts to take over Portugal's Brazilian sugar empire were less successful.

They seized the capital of Portuguese Brazil, Salvador da Bahía, in 1624, but could only hold the city for a year.
Undeterred, they returned in 1630, this time capturing Olinda and Recife in the northeast state of Pernambuco and establishing the short-lived colony of New Holland (1630-1654).

With the help of indigenous allies, the Portuguese took it back from the Dutch—a fundamental marker in the making of Brazilian national identity.

These so-called 'Sugar Wars' had the ironic effect of halting Brazilian sugar cultivation during the three decades of fighting, spurring on sugar production by French, British, and Spanish planters in the Caribbean in Haiti, Jamaica, and Cuba.

First Anglo-Dutch War: a victory for tariffs (1652-54)

With Britain reeling from a ten-year civil war, peace was prevailing on the continent for the first time since the end of the Thirty Years' War (1648).

The Dutch found themselves at the height of their commercial and military powers in the mid-17th century; they owned the largest mercantile fleet in Europe, were no longer at war with Habsburg Spain, and controlled commercial footholds in the East and West Indies, Brazil, and North America, as well as having a monopoly on trade with Japan.

Generally promoting a vigorous free trade policy (when it came to non-human commodities) against the tariff-laden protectionist policies of the British, the Dutch were outselling the latter in every respect.
As the English General George Monck put it: "The Dutch have too much trade, and the English are resolved to take it from them."

In 1651, Cromwell's Rump Parliament passed the Navigation Act, which restricted all trade from Africa, Asia, and the Americas to England or its colonies to strictly English merchant vessels, virtually excluding all Dutch trade with England.

The British soon started seizing Dutch ships in the Caribbean and attacking their convoys in the North Sea, resulting in London's full mercantile control over its seditious American colonies.

It also prevented the Dutch from reinforcing their positions in Dutch Brazil, which they were forced to cede back to the Portuguese in 1654.

A global blow to free trade, it was the beginning of the end of the Dutch Golden Age.

Napoleon's Continental System

Following their victory over the French at Trafalgar in 1805, the British navy blockaded the entire French Empire in 1806 in an attempt to weaken Napoleon through economic warfare.

Unable to break the British navy, Napoleon issued the Berlin Decree in 1806, which banned all imports from the British Empire into the French Empire or any of its allied states (Poland, Denmark, the German states, Italy, the Low Countries).

Undeterred, the British carried out a vast smuggling campaign through Spain and Russia, which eventually forced Napoleon to invade both of these countries.

The latter campaign, in 1812, brought his Grande Armée low for the first time.

Not only did this represent the first time Europe had been brought under a single system of tariffs and import restrictions, it greatly harmed British trade with continental Europe, leading British merchants to aggressively look for alternative markets in Asia and the Americas.

Keep an eye out for part two of our series on historic trade wars at www.thebusinessyear.com