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1931:
In November, Winston Churchill is killed in a car accident while visiting New York City.

1932-1939
Events unfold more or less as IOTL, although pressure for British rearmament is not as strong and the element of the British political leadership in favor of appeasement is stronger.

1940:
As the German armies launch their offensive against France and the Low Countries, Lord Halifax becomes the British Prime Minister. Over the next few weeks, the British and French armies are disastrously defeated and the British Expeditionary Force is forced to surrender at Dunkirk. By the end of June, the French have surrendered. Faced with the prospect of fighting the might of Germany alone, and with hundreds of thousands of British troops now being held as German prisoners, the Halifax government sues for peace.
Hitler lets the British off easy, arriving at an armistice in which the British recognize German claims in Eastern Europe, cease their rearmament program and refrains from imposing trade barriers on essential war materials. Halifax agrees to this, in exchange for the safe repatriation of the British prisoners of war and a commitment that the territorial integrity of the British Empire will be respected. Although many in Britain protest at the terms, the bulk of the population is thankful that the war has been concluded so painlessly and that the prisoners are safely returned.
The French are not so lucky. Following the collapse of the wartime French government, the new French leadership (temporarily headquartered in Bordeaux) is all too willing to accommodate the Germans. Paris and key strategic points are occupied by German forces until the payment of reparations is completed. Painful economic concessions are also extracted from the French. Germany annexes Alsace-Lorraine, prohibits the construction of fortifications along the new Franco-German border, and appropriates vast amounts of French military equipment for the coming campaign against the Soviet Union. Furthermore, permanent German naval bases are established at Brest and St. Nazaire.
It is made clear that major foreign policy or defense decisions by the French government must be cleared through the German ambassador. Essentially, France is reduced to a German vassal state.
Belgium, the Netherlands, Denmark and Norway remain under German military occupation for the time being, as Hitler wants bases from which to attack Britain if it attempts to intervene in the coming campaign against the Soviets. Almost unnoticed, tiny Luxembourg is annexed directly into the Reich.
In general, the world is relieved that the war has been short and comparatively painless, more like the Franco-Prussian War of 1870-71 than the Great War of 1914-18. Many who express concern at the rise of German power are reminded that the terms of the Treaty of Versailles were absurdly unequal and that, if anything, Germany was simply reclaiming its rightful place in Europe.
In the United States, the easy victory of Germany over the Western allies and the fact that Britain is apparently no longer in danger of invasion gives greater weight to isolationists in the Republican Party. As a result, they nominate Senator Robert Taft for President. In the November election, Taft is narrowly victorious against Roosevelt (who was criticized heavily for violating the two-term tradition), but Congress remains under Democratic control. A political deadlock looks likely for the coming years.
In the Far East, the Japanese take advantage of France's collapse to demand the use of northern Indochina as a base from which to attack the Chinese. Germany, hopeful for Japanese support in the coming campaign against the Soviet Union, leans of France to comply. Without any ability to resist, the French have no choice but to agree. Within weeks, Indochina is occupied by Japanese forces. This blocks one of the key railway lines used by the United States to send supplies to China.
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