The Hanseatic League's aggressively protectionist trading practices often aroused opposition from foreign merchants. The league typically used gifts and loans to foreign political leaders to protect its commercial privileges, and when this proved inadequate, it threatened to withdraw its trade and occasionally became involved in embargoes and blockades. Only in extreme cases did the league engage in organized warfare, as in the 1360s, when it faced a serious challenge from the Danish king Valdemar IV, who was trying to master the southwestern Baltic and end the league's economic control there. The league's members raised an armed force that defeated the Danes decisively in 1368, and in the Peace of Stralsund (1370) Denmark was forced to recognize the league's supremacy in the Baltic. In the 14th century the Hanseatic League claimed a membership of about 100 towns, mostly German. The league had no constitution and no permanent army, navy, or governing body except for periodic assemblies (diets).
The Hanseatic League declined partly because it lacked any centralized power with which to withstand the new and more powerful nation-states forming on its borders. Lithuania and Poland were united in 1386; Denmark, Sweden, and Norway formed a union in 1397; and Ivan III of Moscow closed the Hanseatic trading settlement at Novgorod in 1494. The Dutch were growing in mercantile and industrial strength, and in the 15th century they were able to oust German traders from Dutch domestic markets and the North Sea region as a whole. New maritime connections between the Baltic and Mediterranean seas and between the Old World and the Americas caused a gradual diversion of trade westward to the great Atlantic ports. The league died slowly as England contested with the Netherlands for dominance in northern European commerce and Sweden emerged as the chief commercial power in the Baltic Sea region.The Hanseatic League's diet met for the last time in 1669.
Northern German mastery of trade in the Baltic Sea was achieved with striking speed and completeness in the late 12th and early 13th centuries. After its capture by Henry the Lion in 1158, Lübeck became the main base for Westphalian and Saxon merchants expanding northward and eastward; Visby, on the Swedish island of Gotland, was soon established as a major transshipment centre for trade in the Baltic and with Novgorod, which was the chief mart for the Russian trade. From Visby, German merchants helped establish important towns on the east coast of the Baltic: Riga, Reval (now Tallinn), Danzig (now Gdansk), and Dorpat (now Tartu). Thus, by the early 13th century Germans had a near-monopoly of long-distance trade in the Baltic. In the meantime, merchants from Cologne (Köln) and other towns in the Rhineland had acquired trading privileges in Flanders and in England.