On 18 June 1812 US President James Madison signed a declaration of war on Britain. Madison had made a speech to Congress on 1 June, listing a series of American objections to British policy. This was followed by votes for war of 79 to 49 in the House of Representatives and 19 to 13 in the Senate.
The Americans had grievances against Britain because of the impact of Britain’s economic warfare against France on American commerce and because the Royal Navy impressed [often shortened to press] US sailors into service. Under British law, the RN was entitle to impress , or conscript, British merchant sailors. These included men who it considered to be British, but who were US citizens in American eyes.
According to N. A. M. Rodger, the problem was that most countries then defined nationality by birth, but the USA allowed it to be earned by residence. He notes that Albert Gallatin, the US Treasury Secretary, estimated that half of the 18,000 seamen serving on the deep sea US merchant fleet were British subjects. The US government did not issue official documents of citizenship. US Consuls issued unofficial ones, but they had to depend on a man’s word that he was a US citizens, and there was scope for corruption. This gave the British, short of seamen, an excuse to ignore these documents. Rodger says that recent research shows that about 6,500 US citizens were pressed into the RN, with around 3,800 of them being released. Older sources give higher numbers.
France had introduced the Continental System in November 1806, banning its allies and conquests from trading with Britain. The flaw in this strategy was that Britain controlled the seas, so British goods could be smuggled onto the Continent. Britain responded with Orders in Council in 1807, which imposed a blockade on France. Click here for copies of the documents that established these two systems.
Ironically, the British government under Lord Liverpool abolished the Orders in Council on 23 June 1812. Because of the slow speed of communication, it did not know that the USA had declared war on Britain five days earlier. Liverpool had become Prime Minister after the assassination of Spencer Perceval a month previously.
Charles Esdaile says that US exports declined by 40% between 1808 and 1812. This reduced the prices of cotton, tobacco and land. The USA had fought the undeclared Quasi-War at sea with France in 1798-1800 over the actions of French privateers. Problems returned under Napoleon’s rule, but British control of the seas meant that the British Orders in Council had far more impact on the USA than the French Continental System.
In 1807, the Americans attempted to retaliate with a trade embargo on Britain. This was replaced in 1809 with a Non-Intercourse Act that effectively allowed trade with Britain and France via third parties. Thomas Jefferson, Madison’s predecessor as President, had hoped to force British concessions by economic means. The failure of this policy led to the election of many proponents of war to Congress in 1811.
As well as the US grievances with Britain, many wanted to expand into Canada, Florida, which was controlled by Britain’s ally Spain and the Indian territories to the West. Tecumseh, the American Indian leader, was allied to Britain.
The US Army had fallen to 3,000 men in 1807, but 13 new regiments were authorised in January 1812, along with 12 ships of the line and 24 frigates for the USN. In February, State militias of 50,000 men were authorised; the number was increased to 100,000 in April. However, the US Army still had, according to Esdaile, only 7,000 men at the outbreak of war. 
Britain was now at war with France and the USA, but the two wars were separate conflicts. The only impact of each on the other was that British soldiers and ships could be in only one place at a time.
Russell Weigley points out that there were just 7,000 British and Canadian regulars guarding a 900 mile frontier. Reinforcements could not be sent because the Peninsular War with Napoleon was more important to Britain. The USN had only 16 ships, excluding gunboats. US defence against seaborne invasion depended on harbour fortifications and gunboats. The RN had over 600 warships, including 120 ships of the line and 100 frigates, in 1812. Around 100 were in the western Atlantic, but only one ship of the line and seven frigates were in US .
 N. A. M. Rodger, The Command of the Ocean: A Naval History of Britain, 1649-1815 (London: Allen Lane, 2004), pp. 565-66 and note 9 on p. 743.
 C. J. Esdaile, Napoleon’s Wars: An International History, 1803-1815 (London: Allen Lane, 2007), pp. 480-85.
 R. F. Weigley, The American Way of War: A History of United States Military Strategy and Policy (New York: Macmillan, 1973), p. 46-49.