After Lincoln squelched Seward's call for an aggressive program to meet European interference on 1 April, the secretary's policy changed. The secretary of state followed a surprisingly mild policy toward Spain, toward British, French, and Spanish intervention in Mexico, and toward the subsequent French occupation of Mexico City and establishment of Archduke Maximilian of Austria as emperor of Mexico. For example, he officially protested the Spanish occupation of Santo Domingo to the Spanish minister to the United States, Gabriel García y Tassara, and to the Spanish Ministry of Foreign Affairs in Madrid through the American chargé in Madrid. Tassara dismissed Seward's note as being meant primarily for the American public and not to be taken seriously. When Spanish officials explained that Spain had returned to Santo Domingo by invitation and asked Seward to explain his note further, Seward retreated, noting to Tassara that Congress would consider sometime later on whether war was justified.
With regard to the impending tripartite intervention in Mexico, Britain had been firm in insisting that the three powers invite the United States to participate. Seward declined the offer, and since foreign intervention for the purpose of collecting debts was allowed under international law, he had no justification to oppose the three nations. Seward did propose lending Mexico funds to pay off its creditors with Baja California and other Mexican territory as collateral if the European nations would agree not to intervene. The plan failed when Britain, France, and Spain responded unenthusiastically and the U.S. Senate rejected the proposal. In October 1861 the three European nations signed the Tripartite Treaty of London and in December they jointly landed troops in Vera Cruz.
It soon became apparent that the French emperor, Louis Napoléon, had more ambitious schemes in mind, and Britain and Spain withdrew their forces. Seward warned France that the United States would not "view with indifference" the establishment of a European monarchy in the New World, especially so close to the United States, but Napoléon was undeterred. In June 1863, French troops seized Mexico City. Napoléon, with the support of Mexican conservatives in the capital, offered Maximilian an imperial throne. Maximilian accepted and set up his government in the following year. Benito Juárez fled to the countryside and initiated a guerrilla war against Maximilian and the French army that protected him. Seward was unhappy with this turn of events, but did nothing to oppose either Napoléon or Maximilian. War with France or even a threat of war, he decided, would not serve Union interests. Mexican affairs, like Caribbean matters, could wait until after peace had returned to the United States.
Confederate involvement in Mexico began in May 1861, when Toombs sent John T. Pickett to Mexico City to open a permanent embassy, secure recognition, and negotiate a treaty of amity and commerce. Astonishingly, Toombs also instructed Pickett to point out to the reformist Juárez the similarity of the Confederate and Mexican economies and the resemblance between slavery and peonage. Pickett's career as a filibusterer in Cuba and his record as consul in Vera Cruz did not inspire confidence among Mexicans, and Juárez was not impressed.
Pickett's mission was a disaster. He was unable to overcome Mexican fears of Southern expansionism or hostility toward slavery, both emphasized by the Union minister, Thomas Corwin. When Pickett suggested that the Confederacy might return some of the territory taken in the Mexican War in exchange for recognition, Mexican officials were skeptical. By the fall of 1861 Pickett had alienated all of those with whom he had dealt, chiefly by exposing his contempt for Mexico and his racism. When he became involved in a public brawl with a Union sympathizer in November, the Mexican authorities arrested him as a common criminal. When Davis and his cabinet learned of Pickett's behavior and arrest, they did not defend him but, rather, recalled their diplomat in disgrace and repudiated his actions. The damage, however, had been done. Juárez had no interest in supporting the Confederacy and maintained a strict neutrality throughout the Civil War.
In Mexico, the Confederates had greater success in negotiations with Santiago Vidaurri, the governor of Nuevo León and Coahuilla, who had long had separatist inclinations and conducted his affairs autonomously. The Confederate agent, Juan A. Quintero, had solid relations with Vidaurri. Quintero secured an important commercial agreement and a promise from Vidaurri that he would block any requests for the transit of Union troops across territory under his authority. The Confederate government instructed Quintero to discourage Vidaurri from separating from Mexico and asking for annexation to the Confederacy. President Davis doubted the Confederate Congress would welcome the addition of a Mexican province to their nation and he wished to avoid the embarrassment of a rejection. For all their efforts, Mexico was a low priority for the Confederates. They understood that the key to a successful foreign policy remained in Europe.