Henry VII’s foreign policy was shaped by a determination to secure his dynasty, stabilise England’s economy, and avoid costly wars. Relations with Burgundy and Spain, alongside key trade agreements, were central to these objectives.

England and Burgundy

Burgundy was a major European trading hub and England’s primary market for wool, the backbone of its economy.

Map of the Burgundian Netherlands (1477) showing the provinces that included the key commercial heartlands engaging with English wool and cloth. This spatial context helps explain why securing trade with Burgundy mattered so much to Henry VII. The map key also notes acquisition phases and lists all “Seventeen Provinces”, which goes slightly beyond the OCR focus but does not distract from the relevant geography. Source

The Burgundian Threat

Burgundy became a refuge for Yorkist claimants, particularly Margaret of Burgundy, sister of Edward IV and Richard III. She offered support to pretenders such as Lambert Simnel and Perkin Warbeck, making her a constant threat to Henry VII’s security. The duchy’s position as a Yorkist stronghold meant Henry could not ignore Burgundy, despite its commercial importance.

The Trade Embargo

Henry VII placed an embargo on trade with Burgundy in 1493 after Margaret’s open support of Warbeck. This embargo was risky, given England’s reliance on Burgundian markets, but it demonstrated Henry’s willingness to prioritise dynastic security over immediate economic gain. The embargo strained England’s merchants, who lobbied for its removal, yet it pressured Burgundy diplomatically.

Magnus Intercursus

In 1496, relations improved when Margaret’s stepson-in-law, Maximilian of Habsburg, recognised Henry’s right to rule. This led to the Magnus Intercursus (Great Intercourse), a commercial treaty restoring trade privileges.

• English merchants could trade freely with Burgundy, except in Flanders.

• It gave England advantageous terms, greatly benefiting its wool trade.
  This treaty marked a success in Henry’s commercial diplomacy, reinforcing both economic stability and political recognition.

Malus Intercursus

In 1506, after Philip of Burgundy was shipwrecked in England, Henry exploited the situation to secure the Malus Intercursus (Evil Intercourse).

Portrait of Philip the Handsome (1478–1506), ruler of Burgundy (and later Philip I of Castile), whose 1506 visit enabled Henry VII to extract the Malus Intercursus. Including his image helps students connect the treaty title to a real political actor. The museum record includes collection history that exceeds the OCR scope, but the portrait itself is squarely relevant. Source

• It gave extraordinarily favourable terms to English merchants, exempting them from many duties.

• In practice, it was too harsh on Burgundy and was never fully enforced.
  Although it was diplomatically short-lived, it revealed Henry’s opportunism and ambition in economic negotiations.

Relations with Spain

Spain was emerging as a powerful European state under Ferdinand of Aragon and Isabella of Castile. Alliance with Spain promised Henry both international recognition and dynastic security.

Treaty of Medina del Campo (1489)

This treaty was a cornerstone of Henry’s foreign policy, covering trade, marriage, and mutual defence.

• Spain and England agreed not to harbour rebels or pretenders, strengthening Henry against Yorkist threats.

• Both sides gained favourable trade terms, boosting England’s commercial position.

• Most importantly, it arranged the marriage of Prince Arthur, Henry’s heir, to Catherine of Aragon, cementing an alliance between the Tudor dynasty and Spain.

Catherine of Aragon (portrait type associated with Joannes Corvus), whose marriage agreement under Medina del Campo (1489) anchored Henry VII’s Spanish alliance. The image reinforces the role of marriage diplomacy alongside trade policy. As an early-modern portrait, it naturally includes artistic details beyond the syllabus. Source

The treaty symbolised England’s reintegration into European politics after decades of instability.

Problems with the Marriage Alliance

Despite its promise, the marriage arrangements proved complicated.

• The size of Catherine’s dowry became a persistent issue of negotiation.

• The death of Arthur in 1502 undermined the agreement. Henry VII attempted to preserve the alliance by arranging Catherine’s marriage to his second son, Prince Henry (later Henry VIII). This required a papal dispensation and was not finalised during Henry VII’s lifetime.

Although troubled, the marriage negotiations ensured England remained tied to Spain’s powerful monarchy, enhancing Henry’s international credibility.

Commercial Diplomacy

Henry’s foreign policy consistently used trade agreements to strengthen his dynasty and economy.

Trade Aims

Henry’s goals were to:

• Increase crown revenues without heavy taxation.

• Secure the loyalty of merchants and the prosperity of the wool trade.

• Use trade as leverage in foreign negotiations.

Key Agreements

• Magnus Intercursus (1496): Opened Burgundian markets to English merchants, securing prosperity and recognition.

• Malus Intercursus (1506): Granted overly generous terms to England, but politically unsustainable.

• Treaty of Medina del Campo (1489): Incorporated beneficial trade clauses alongside dynastic marriage arrangements.

Henry’s careful balance between commercial advantage and dynastic security reflected his broader strategy of cautious yet ambitious diplomacy.

Marriage Negotiations as Diplomacy

Dynastic marriages were a vital diplomatic tool. For Henry, they offered legitimacy for his new Tudor dynasty and protection against Yorkist claimants.

• Arthur and Catherine of Aragon: Strengthened England’s ties to Spain and deterred French aggression.

• Later negotiations sought further advantageous matches, though not all were successful.

Marriage diplomacy intertwined with trade and politics, reinforcing Henry’s reputation as a shrewd and pragmatic monarch.