Mercantilism was based on the idea that a country’s strength was based on trade, acquiring colonies, and accumulation of wealth, of which there was a fixed amount. Following this belief, governments sought to be self-sufficient (incentive for colonization) by using colonies to provide raw materials for the mother country. In this view, each country was competing to have a bigger piece of the pie.

Britain passed a series of Navigation Acts to enforce their mercantilist view. The Navigation Acts prohibited trade to and from colonies in anything except English- or colonial-built ships and operated by English/colonial crews. They also stated that imports must come through England and that certain enumerated exports could only go to England. In essence, these laws largely limited colonial trade to that which was done with Britain.

In addition to limiting trade between the colonies and other countries, mercantilist laws limited manufacturing in the colonies by prohibiting the shipping of certain manufactured items. This was based on the mercantilist belief that colonies's purpose was to provide raw materials for the mother country's benefit. The colonies could harvest the wool, but the mother country would turn it into products like hats, which it could then sell back to the colonies.

Not surprisingly, these laws led to some discontent among the colonists and even flouting of the laws through things like smuggling.