It seems so strange that a neutral country would comply with one blockade, but ignore another one, especially since it is my understanding that the US was really neutral when the war broke out.
Am I misunderstanding? Why was there such outrage over the sinking of a US ship by the Germans when a ship headed for Germany that would ignore the UK navy would also be sunk?
Edit: apologies for the mangled title...
The willingness of neutral nations to comply with a blockade depends entirely on the ability of the blockading nations to carry out the blockade. During WWI, it was much easier for the British to blockade Germany than vice-versa, for three main reasons. Firstly, geography greatly aided the British. To reach Germany from the Atlantic, a ship would have to travel through the North Sea. The position of the British Isles mean that there are only two entrances to this sea - and hence were only two places where patrols had to be made. For the Germans, there were no such bottlenecks. Britain's main ports are scattered widely around the coastline of the island. As an example, a ship travelling to a major British port on the west coast could go to either Bristol in the South, Liverpool in the Midlands, or Glasgow in Scotland, all widely separated. To blockade these ports would require far more ships. Secondly, the relative strength of the two navies greatly aided the British effort. The Royal Navy heavily outnumbered and outgunned the German navy, especially outside the North Sea. This meant that the British blockade could consist primarily of armed passenger liners (AMCs) and obsolete cruisers. The German blockade, by comparison, was composed solely of submarines. In WWI, a surface ship had two main advantages over a submarine - they were fast enough to catch a fleeing merchant, and thanks to their higher waterline and masts, could observe a much greater area of the sea. Finally, the British had the advantage of a greater intelligence effort. British spies in neutral ports provided a wealth of information on cargo manifests and shipping routes, making it much easier for the British blockade to seize ships carrying contraband. There were some German efforts to establish such networks, but they were still comparatively ineffective. Altogether, this greatly increased the risk for American ship-owners shipping to Germany, or for American businessmen shipping cargo in German ships, compared to those shipping to Britain. This meant that such people were more likely to chose to ship to Britain.
That said, Americans were willing to trade with Germany despite the British blockade. German blockade runners made frequent attempts to escape the North Sea. They carried goods that could be sold for hard currency, which could in turn be used to purchase strategic materials. They would then return to Germany. One of the more interesting such blockade runners was the cargo submarine Deutschland. She made two trips to the USA, carrying a cargo mainly composed of dyes, drugs and gemstones. These were sold on the American market, and she would return carrying cargoes of nickel, tin and rubber. Her sister ship, Bremen, was sunk on her maiden trip, possibly through an accidental collision with a British AMC. However, the British were much more able to do the same. The British Merchant Navy was the largest in the world (meanwhile, the RN had forced much of the German merchant fleet into port), while the Empire was a huge source of raw materials. As such, the British had a lot to sell to the US, and more than enough ships to carry things to and from America.
Finally, the difference between the British blockade and the German one came in their adherence to established international law. The 1856 Declaration of Paris stated that, while belligerent nations were free to interfere with the trade of other belligerent nations, neutral trade was protected. Neutral ships, even those carrying enemy cargoes, could not be impounded or sunk. Similarly, enemy ships carrying neutral cargo was protected. However, these protections were waived for contraband items, which came in two categories. Absolute contraband covered items like ammunition and explosives, which were useful only to the military, while conditional contraband was items like pit props, which had both civil and military uses. The Declaration of Paris made no attempt to define contraband items, an omission rectified by the 1909 Declaration of London. This gave rigid definitions of contraband - for example food was considered conditional contraband if it was for military consumption only. The Declaration of London also addressed the concept of 'continuous voyage' - a possible way round a blockade was for contraband to be shipped to a neutral neighbour, and then shipped overland. The London Declaration allowed absolute contraband intended for a belligerent to be stopped even if it was headed to a neutral port, but did not extend this to conditional contraband. The London and Paris declarations (as well as the 1907 Hague Conventions) also set limits on the way a blockade could be carried out. Under these rules, called 'prize rules', merchant ships had to be stopped and searched before they could be sunk or impounded. Should they be sunk, the crew had to be placed in a place of safety. This could be a neutral merchant or the ship carrying out the search, and only included lifeboats if the crew were given supplies and charts sufficient to see them to land, or if that land was close by. It was much easier for the British blockade to carry out the requirements laid down by these declarations. The British government also wished to adhere to international law, to avoid jeopardising their relationship with neutral powers. While they did extend their powers, for example by declaring that continuous voyage extended to conditional contraband, or that the North Sea was a dangerous war zone which ships entered from the north at their own risk, they justified this by referring to German breaches of international law. The rights of neutral ships were respected, as were the actions of ships exempt from prize rules. Meanwhile, the Germans took a looser approach to the law. Prize rules greatly hampered submarines, by denying them their greatest asset - their ability to submerge and hide. In February 1915, the German Navy declared that they would carry out a campaign of unrestricted submarine warfare in the waters around the British Isles. Under this, prize rules would be ignored, with any British ship being treated as a target, while neutral ships were at risk of sinking should they be misidentified. This led to several major diplomatic incidents, whereby ships that should have been protected were instead sunk. These incidents included not only the famous Lusitania sinking, but also the sinkings of the Arabic and Ancona, both passenger liners, and the sinking of the Harpalyce, a British merchant engaged in carrying humanitarian supplies to Belgium. The controversy engendered by these incidents led to the cancellation of unrestricted submarine warfare in November 1915, however, the Germans would return to it in early 1917 leading ultimately to the American entry to the war.
Seems that u/thefourthmaninaboat beat me to it. I'll post my answer anyway, since it gives some more detail on blockade operations, as well as providing sources. It also answers some of OP's follow up questions.
This is quite a complicated question. A full answer is going to be a little bit long winded. Bear with me.
For the record – officially there was an Entente – rather than British – blockade of Germany during WWI. For practical reasons, the British took responsibility for many of the naval aspects of this blockade, while the French were responsible for the much less well known landward blockade. The naval blockade is therefore often referred to as “the British blockade”.
First we have to be clear on what the term “blockade” actually refers to. During the Great War, blockade was defined in international law under the 1856 Paris Declaration Respecting Maritime Law (more commonly known as the “Treaty of Paris”). The declaration had been signed and ratified by all the major naval powers, and sought to regulate international trade in times of war. It stated that a blockade would only be considered legal as long as it was effective – so a blockading nation would have to be able to physically prevent neutral merchantmen from reaching blockaded ports. This rule had been confirmed in the 1909 Declaration of London – an agreement intended to update and clarify a number of issues which had arisen since 1856 – but this declaration had not yet been ratified by Britain by the time war broke out. Although not legally binding, it still carried significant moral weight however. Traditionally the “effective blockade” had meant “close blockade” – i.e. the maintaining of a sufficient number of warships within short distance of the blockaded port so as to prevent civilian entry or exit. If such a close blockade was maintained, it then became legal for a blockading nation to stop neutral merchantmen on sailing on this port, even when on the high seas. By 1914 technological developments had made this practice untenable. The proliferation since 1856 of torpedoes, mines, submarines and similar exposed expensive surface units to unacceptable danger. For this reason, the British government chose to argue – very controversially – that a legal and effective blockade could be mounted from much further away than had previously been accepted. When war broke out in August 1914, the Royal Navy therefore instigated a blockade of Germany, not off the German coastline, but instead at the entrances to the North Sea – the English Channel, and the Scotland-Norway gap. Even though it involved a controversial interpretation of international law, the blockade was effective – in that it did indeed serve to deny civilian merchantmen plying the transatlantic sea lanes access to the German ports. The German blockade of Britain, even more controversially, was maintained by U-boats – and was very far from effective. Even at the peak of operations, in the summer of 1917, U-boats and mines stopped or sank only 25% of merchant ships bound to or from the British isles.
Second, American merchants did not really “comply” with the British blockade of Germany – even if they considered it legal. With the closure of the German ports to transatlantic traffic, Germany instead rerouted a large portion of her import and export trade through what came to be known as “the northern neutrals”. Goods which before the war would have been shipped directly to Germany, were now instead carried to the Netherlands or Scandinavia, and there transferred to other vessels or trains for the final leg of the journey to Germany. The British were well aware of this loophole, even before the war began, yet for the first couple of years they proved spectacularly bad at closing, or even limiting, it.
The British originally sought to use a legal construct known as the doctrine of continuous voyage. Even though it was not part of the 1856 declaration, it was widely accepted internationally. It held that neutral cargoes were liable for confiscation, if they could be proved to be ultimately destined for enemy governments or armed forces, even if the direct destination was a neutral country or civilian person or organisation. Yet such ultimate destination was very difficult – if not impossible – to prove. Merchants – German or neutral – were unlikely to write “to the German army” on any crates they wanted to send, if they though the cargo was likely to be stopped by the British. A large number of neutral vessels stopped by the British navy in 1914 and 1915 were released because their cargoes could not be conclusively proven to have German destination.
It should also be noted that the American merchant navy in 1914 was rather small relative to its later size, totalling only around 4million GRT – as against 16million GRT in 1922. Much of this existing tonnage was already tied up in pre-war trade with Asia, the Americas and the rest of Europe. This meant that American merchants wishing to trade with Germany were reliant on other nations’ shipping. The largest of these merchant navies by far was the British, and the British government completely failed to effectively regulate its merchants – largely because of inter-departmental rivalries and conflicting priorities (the Board of Trade (British ministry of commerce) for example argued that preventing British merchants to carry trade between neutrals would severely damage the British economy). Thus a very large proportion of American exports to Germany in 1914 and 1915 was actually carried to the northern neutrals on British ships. Many parts of the British government were also very reluctant to interfere with neutral trade, both for moral and for practical reasons. One of the most important of these was the need to maintain a modicum of good relation with the US government, the cooperation of which was required for the Entente to have access to purchases and capital raised on the American market. The US government protested – sometimes vigorously, sometimes more timidly – against a number of British blockading practices all the way through to 1917.
The end result of all this is that from 1914 to 1916, a very large amount of overseas goods – including much from the United States – reached Germany one way or the other, in spite of the British blockade. To say that the American government complied with the British blockade is therefore missing much of the point. Both British and German merchants had extensive access to the American market during the first few years of the war.
1916 was a turning point in the British prosecution of the blockade. In February the government established a Ministry of Blockade (MoB), with the power to coordinate all British economic warfare efforts. It regulated British merchants, preventing them from carrying neutral goods unless these goods could be guaranteed not to reach Germany. The onus for making these guarantees were placed on the governments of the northern neutral countries, on pain of being cut off from vital overseas sources of supplies themselves. The doctrine of continuous voyage had thus been replaced by a system of forced rationing. Neutral states would only be allowed imports for domestic use - not for direct reexport, nor for the production of goods for export.
The MoB also created an effective blacklist system, by which British and neutral merchants or shippers which were suspected of dealing with German or German-friendly firms or organisations were denied access to the British controlled infrastructure supporting global trade – such as fuel, ports, insurance, banking, trade and price information etc. All of these efforts combined to reduce the transshipment of German goods through the northern neutrals, so that by the beginning of 1917 these stood at negligible levels. In April 1917 the United States itself declared war against Germany, which finally sealed the net more or less completely.
Thus, the United States didn’t comply with one blockade, while ignoring another. The German blockade of Britain was not a blockade in the legal sense, nor – at least for most of the war – in any real sense. Nor did the US government prevent German traders from accessing the American market. The British did try a number of methods to limit American-German trade, but were unable to stop it completely until the beginning of 1917, by which time the US was on the verge of declaring war on Germany anyway.