The policy described is domestic policy as it takes place within U.S. borders. The answer can't be foreign policy as that would be policy applying outside the country. Neither can it be either of the other two because the question has nothing to do with the functions of trade or judiciary "law making" via the interpretation powers granted to the judicial branch.
Many Americans along the nation's western frontier believed that the British in Canada encouraged Indian raids on their settlements. The most notable result of the War of 1812 was an upsurge in American nationalism.