By 1810, Madison realized the American trade boycott was having little effect, for both countries continued seizing American ships. The Non-Intercourse Act was repealed in May 1810, but Madison was ready to prohibit trade again, if necessary. U.S.-British relations worsened as a result of these maritime troubles and also because of America's expansion into British-held lands in the West, in Canada, and in Florida (Spanish-held at the time). Anti-British factions in Congress accused Britain of provoking Native American attacks on American frontier communities. In November 1811, Governor William Henry Harrison of Indiana fought the Shawnee nation with American troops at the Battle of Tippecanoe. Though the president had not authorized the use of troops, the incident roused support for military preparedness as war with Britain looked probable.

By the spring of 1812, Madison urged Britain to revoke trade restrictions. Great Britain ignored the requests, and Madison asked Congress to place an embargo, implying that even stronger measures might be warranted against the country.

The British, at war with France's Napoleon, had a pressing need to increase the ranks of the Royal Navy. They boarded U.S. vessels and impressed American sailors into His Majesty's service. Adding to the turmoil, a congressional faction dubbed the “War Hawks” viewed war with Britain as potential relief from the Native American hostilities Great Britain had backed, and also as a means of further expansion in Spanish Florida, since Spain was allied with Britain in the battles against Napoleon. Sectional politics were becoming quite apparent, which was evident in New England's stance against going to war with England because of their own commercial interests. At the Hartford Convention in December of 1814, New England Federalist representatives supported the doctrine of states' rights in declaring that a state had the right to oppose and not abide by congressional actions.

Telling Congress that “our commerce has been plundered in every sea,” Madison made it clear he felt Britain was intent on destroying American commerce, while sidelining any action against French hostilities. On June 19, Madison signed a declaration of war, passed by both houses of Congress. What wasn't known, however, was that Britain had actually revoked the practice of intercepting American ships a few days prior, and apparently the French had repealed their own restrictions on American trade.