The colonial molasses trade occurred throughout the seventeenth, eighteenth, and nineteenth centuries in the European colonies in the Americas. Molasses was a major trading product in the Americas, being produced by enslaved Africans on sugar plantations in European colonies. The good was a major import for the British North American colonies, which used molasses to produce rum, especially in distilleries in New England. The finished product was then exported to Europe as part of the triangular trade.

Sugarcane grows in hot, humid climates. After landing in the Canary Islands, Christopher Columbus brought sugarcane to the Caribbean during his second voyage to the Americas, in 1493. During the eighteenth century, sugar-refining methods at the time produced much more molasses than sugar they do today. It was estimated that "as much as three parts molasses was produced to four parts sugar, and on an average it was estimated that the ratio of molasses to sugar was about one to two." This molasses was either used for table use or in the production of rum.

To make rum, sugarcane juice is fermented with yeast and water and then distilled in copper pot stills. The liquor was given the name rum in 1672, likely after the English slang word rumballion which meant clamor. Sugar plantation owners in the Caribbean often sold rum on discount to the naval ships so that they would spend more time close to the islands, protecting pirates. Rum also gained popularity in Britain as English ships brought the liquor from America across the Atlantic Ocean.

In the 18th century, New England became one of the leading rum producers in the world. It was the colonies' only commodity that could be produced in large quantities by non-English powers and sold to the English. The French West Indies had a large supply of molasses at this time, but the area was lacking in lumber, cheese, and flour. These products were the main exports of the North American colonies, which led to a very secure business relationship between the two areas.

Molasses was important in triangular trade. In the triangular trade, slave traders from New England would bring rum to Africa, and in return, they would purchase enslaved Africans. The enslaved cargo was then brought to the West Indies and sold to sugarcane plantations to harvest the sugar for molasses. Molasses was then brought from the West Indies to the colonies and sold to rum producers.

The molasses trade experienced many problems in the seventeenth and eighteenth centuries. Throughout this period, there was often never enough demand to meet the large supply of molasses that was continuing to increase. Neither England nor France had much of a market for molasses. England imported molasses mostly in the form of rum, but that was usually coming from the colonies at this time. The French islands in the West Indies were prohibited from shipping rum to France about France's market for brandy. In the last decades of the eighteenth century, imports of French rum were at an all-time low. To combat this problem, many English planters on the islands developed their own local distilleries to deal with the large surplus of molasses. There were no specific restrictions on the English islands, so they were able to profit from the disposal. By the 1650s, many plantations on the islands had their own distilleries and were exporting rum to the mainland colonies. By the beginning of the eighteenth century, rum production was rising rapidly.

At the beginning of the eighteenth century, Dutch possessions in the West Indies began to encourage trade with the islands and New England. Several bills were to be prepared to hinder Dutch trade with colonies, but none of them were passed. By 1715, Boston and many other colonial areas were importing around one hundred thousand gallons of molasses from the Dutch annually. New York was also importing large amounts of foreign molasses compared to England. At the same time, French imports of molasses to the colonies were also growing. This combination of importing foreign products to the English colonies caused England a lot of agitation in the years to come.

When the trading of molasses first began, it was unrestrained, apart from small local taxes. The colonies began to prefer French molasses to British because of the price difference. French policy provided incredibly cheap prices, and the British could no longer compete. To control the molasses trade with the English colonies, the Parliament of Great Britain decided to place high taxes on any molasses that was shipped from a foreign power to the colonies in North America. The Molasses Act 1733 imposed a fee of six pence per gallon on foreign molasses. This act was meant to force the colonies into buying molasses from the British or stop producing rum in North America. Many, however, say that the Molasses Act was put in place to destroy New England's rum industry. Contrary to Parliament's plans, the colonies first protested this act. They soon realized that instead of complying with the new Molasses Act, it would be much easier for them to just ignore the new prohibitive taxes and smuggle molasses from the West Indies. Many ports collected about half of the legal duty that must have been imported to their harbors. This was clear in Massachusetts, where it "...imported legally less than half as much molasses and rum as it exported...". These illicit operations would continue for several decades. Had the Molasses Act succeeded in its purpose, New England rum production would have been destroyed.