How about Communist Canada?
Canadians, being both peace-loving and astute, immediately saw the rise of the British King's Party for what it was, and broke off as an independent country to avoid the imperialist wars of aggression. The economy, still suffering deeply from the great depression, was overhauled with new socialist policies. These changes were very effective and popular, resulting in the communist party winning the elections and with a mandate to peacefully re-organize the state into a revolutionary organ of progress.
However, this good was but an isolated garden in the dark forest of the world. France and Germany saw the bloody re-establishment of their glory-bound imperial dynasties. Spain remained wracked in conflict until the fascists stamped out the republic. Japan and the Soviets carved up Asia between themselves, signing a non-aggression pact that was bad news for the rest of the world.
Inspired by the Nazis, and having taken in many refugees from the German civil war, the Silver Legion of America rose to prominence. However, when they tried to seize control, most Americans were still loyal to the constitution, and fought back. Canada, not wanting a dangerous fascist state as a neighbor, struck while the rebellion was still vulnerable, capturing Chicago unopposed after sending fast cavalry units through the crossings between the Great Lakes. Canada secured the midwest, and proceeded to blitz south, bisecting the country, capturing the entirety of the south while main American armies of both sides stalled each other on the West and East coastal regions. With no core region left to supply the rebels, they surrendered. Canada agreed to hand over the legitimate USA government control over most of the territories captured, but retained the midwest to administer the heavily pro-german bund region for "reconstruction" with reunification promised in the future. The US grumbled, but had no means to push the issue, so temporarily ceded control over the region.
However, Canada quickly ran into a problem, the Americans in the region had been radicalized against democracy and did not want reunification under a government they saw as traitorous. Additionally, Canada did not have the necessary manpower to police the region, which quickly spiraled out of control. The conservative french-speaking quebecois could not serve in an a socialist english-speaking army, and thus Canada floundered in the administration of an occupied zone more populous than their home country.
The solution was to re-purpose the anti-American locals into a puppet government, where they would police themselves. Although these communists were such authoritarians that their homegrown brand of socialism more resembled the totalism of the early nazis, to which the local fascists were quick to adapt. Very different from the peaceful democracy of the north.
However, this tyranny was necessary as part of the military occupation effort. Canada aligned itself diplomatically more with the Soviets as world tensions rose...
The spark was lit in the Balkans, when Italy forced an ultimatum on Yugoslavia. France and Britain, both wanting to be rid of Mediterranean competition, promised to protect Yugoslavia and counter-invaded Italy. Hungary and Bulgaria sided with Italy. Once the dust settled, the imperialist pair did their usual perfidy, reneged on their promises, splitting up Italy and the Balkans into various puppet regimes. However, there were two political upheavals. The Dutch reacted to the fall of democracy among the Great Powers of Europe by banding together the many small nations. They sought strength in unity. The Italian government was overthrown by the pro-democracy coup had joined the European allies. Hungary deposed their puppet government, annexing themselves to Austria. This sparked the second war, where the rest of the balkans, along with the rest of Europe was secured for the Imperials. Germany, having invaded austria-hungary, joined France and Britain, officially forming the Three Emperor's League.
However, the Europeans resisted their occupations, forming strong links with America, who supported them in war. However, once the European mainland was lost, this was a mere distraction once they turned their full attention to the Japanese, who had struck at the European colonies, both Allied and League.
The Emperor's League, having allowed the Soviets too much time to build up, realized the time for action was now or never, with the excuse of "protecting" eastern Europe from the Soviets, they started a war. But since the Baltic allies remained neutral, there wasn't enough frontage for a full invasion. this was just a border war for the Ukraine/Poland region. The Middle East also saw action, as the Imperials moved from their Syrian colony to "liberate" Mesopotamia, but floundered in the supply-dry desert.
After a year and a half of static trench warfare in the limited border regions, Canada is attempting to mediate a truce. This would not only end the frozen border clash between the Soviets and Empires, but could precipitate peace between the the warring parties of the Allies, League, and Japan. The reality is that the Asia/Pacific is firmly held in Japanese hands due to fortuitous surprise destruction of what was left of the US navy after the Civil War, which also means the US cannot hope to liberate the European Allies. Although the Emperor's League has secured most of Africa, they cannot reclaim their colonies in Asia and Caribbean. The British Royalist coups failed in all former dominions, leaving each as bastions of Democracy in their regions, seeking to tie themselves to America for protection.
The Divide in the USA, between the communist government and the democraticc government continues to grow. An Iron curtain has fallen, and reunification slips further away...