What is an economic cause and effect of the Declaration of Independence?

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kmj23 eNotes educator| Certified Educator

The 13 American colonies issued the Declaration of Independence on July 4 1776, a document which demonstrated their unanimous desire to split from Great Britain. One of the reasons for this decision was economic: over the last decade, Britain's fiscal policy in the colonies had created significant tensions between the two sides. This had started with the Sugar Act in 1764, gotten worse in 1765 with the Stamp Act, and reached dangerous levels with the introduction of the Declaratory Act in 1766.

In contrast, Britain viewed the Declaration of Independence as a trivial document and responded by trying to weaken the colonies economically by disrupting trade. They did this by taking control of many port cities and using their powerful navy to prevent ships from leaving and entering the country. This move was successful and led to an increase in smuggling, with Americans paying inflated prices for many everyday commodities. It was not until 1778 that America received a much-needed funding boost, after it formally allied with one of the Britain's enemies, the French, which enabled the country to prepare for fighting the Revolutionary War.