And in that case, either they join the Axis or Dictator Sam invades them anyway.
Who is running the USA anyway? Because I can guarantee it's not FDR, or anybody from OTL because the USA joining the Axis in 1938 is completely far-fetched. Why would they invade neutral Canada? Just because?
OR am I to accept this as a purely accademic exercise? Because if that's the case I'll wade in. The Allies are fucked. You've combined the most populous country in Asia (China), with the most populous country in Europe (Nazi Germany) with the most populous and industrialized nation in the Americas (The USA). It's an Axis wank pure and simple.
If you wanted to make this a tad more interesting (ie a tad more balanced), I'd propose the following. Shift the USA and Japan over to the Allies, shift China the USSR and the South Americas over to the Axis. This is of course assuming we are ignoring politics and running on handwavium. Essentially your sides look like this.
The Axis Major Powers
The Soviet Union
Nazi Germany
The Republic of China
South American Powers
Italy
And others
The Allies
The British Empire
France
Japan
USA
And others
This presents a much more interesting war scenario from an academic perspective.