In the early 1790’s France and Britain were the world powers trying to control most commerce from and to their far away colonies. George Washington decided that the United States would not take sides and would remain neutral. When the U.S and Britain ratified the Jay Treaty in 1796, a treaty of amity, commerce and navigation, the French government was highly unsatisfied with the agreement as it gave Britain the most favored nation trading status. France reacted by seizing U.S. merchant ships in the West Indies and by refusing to receive Charles C. Pinckney, who replaced Monroe, as U.S. Ambassador to France. Facing arrest Pinckney had to flee to the Netherlands.
John Adams wanted to avoid a full scale war with France opposing his own Federalist Party that under the direction of Alexander Hamilton used these events to turn U.S. citizens against France. Most of the impact of the XYZ affair was in domestic politics, as it was used as a tool for the opposition.
So your final answer is FALSE.