What if the U.S. froze Japanese assets in America and unilaterally embargoed oil from 1 Feb, 1940?

raharris1973

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This is about the earliest it would have been *legal* under American law to do this. The US had given the required six months notice of the termination of the 1911 Japanese-American Treaty of Commerce and Navigation in July 1939, the six months notice period was complete by January 25, 1940.

As this is an economic step rather than an alliance building step or a militarizing step this probably is not too politically costly for the Roosevelt Administration, although it will have its critics.

The thinking motivating the American move is intended to protest continued Japanese aggression in China, but more importantly to limit Japanese resources should they contemplate joining Germany's side against Britain and France. Whether the end result is helpful or not, FDR thinks of this as "holding the ring" for the British and French.

What are the knock-on consequences of this?

Economically for Japan, they cannot get raw materials from the US, spend any accounts they have in the US or have imports delivered in American merchant ships.

However, given the Craigie-Arita settlement (https://en.wikipedia.org/wiki/Tientsin_incident) and the memory of the recent and unwelcome Tianjian Crisis, London is not likely to follow the US moves in lockstep. So, Japan can continue to import goods from the British Commonwealth and spend its sterling-denominated assets.

However, even though the war in Europe is not active and is "phony" at this stage, Britain is not likely to want or to be able to fill all potential Japanese demand.

I don't see other international oil producers like the USSR, Romania or the Dutch East Indies following the American lead either. Latin American oil producers are a question mark. The US has a lot of leverage over them.

What happens to the Japanese economy and what next steps does the Japanese government contemplate?

Economically for the U.S., it loses its Japanese export market, which is bad for some oil producing areas. But does Allied purchasing of fuel and metals end up picking up most of the slack?

Does this US measure end up causing the Japanese difficulties they try to fix by military means? If so, when and where do the Japanese take additional military action? What emergency economic measures do they undertake in the interim?

In particular, once the the phony war turns to blitzkrieg, what do the Japanese do, if they have not done something already?
 
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raharris1973

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Some probable knock-ons:

Japan needs to conduct more of its trade through complex and expensive barter or alternate financing deals.
Japan becomes more focused on achieving a Neutrality Pact with the U.S.S.R. sooner rather than later. The USSR could be fairly happy to oblige, to protect itself and accelerate the chances of Japan versus west conflict.

Japan has no absolutely compelling reason to invade the DEI at this stage in 1940, with the Dutch being willing to sell whatever the Japanese can pay for and ship.

Despite anger over the US economic measures, Japan will not anticipate that attacking the Americans will be useful in improving Japan's economic situation in this current contexts of early 1940.

Japan will find it hard to find any way out of this box in the months February through April 1940, with the western allies standing reasonably strong in Europe and few anticipating a German victory in Europe, let alone a quick one.

Japan might open up to a compromise where it partially withdraws from China. The British and French at this time might find a withdrawal from most of China south of the Great Wall, but not Manchuria, ideal as it concentrates the Japanese more against the Soviets, whom they regard as nearly hostile semi-allies of Germany.


If things are not resolved by May, the fall of France (and Netherlands) and entry of Italy into the war will likely cause a Japan to be tempted to go to war against the European powers. Attacking the Philippines also would make for a more compact and secure domain, although in May 1940, US forces in the PI and Guam are so minor they can probably be safely ignored, especially as there has been no passage of the two-ocean Navy Act yet.
 

trurle

Banned
This is about the earliest it would have been *legal* under American law to do this. The US had given the required six months notice of the termination of the 1911 Japanese-American Treaty of Commerce and Navigation in July 1939, the six months notice period was complete by January 25, 1940.

As this is an economic step rather than an alliance building step or a militarizing step this probably is not too politically costly for the Roosevelt Administration, although it will have its critics.

The thinking motivating the American move is intended to protest continued Japanese aggression in China, but more importantly to limit Japanese resources should they contemplate joining Germany's side against Britain and France. Whether the end result is helpful or not, FDR thinks of this as "holding the ring" for the British and French.

What are the knock-on consequences of this?

Economically for Japan, they cannot get raw materials from the US, spend any accounts they have in the US or have imports delivered in American merchant ships.

However, given the Craigie-Arita settlement (https://en.wikipedia.org/wiki/Tientsin_incident) and the memory of the recent and unwelcome Tianjian Crisis, London is not likely to follow the US moves in lockstep. So, Japan can continue to import goods from the British Commonwealth and spend its sterling-denominated assets.

However, even though the war in Europe is not active and is "phony" at this stage, Britain is not likely to want or to be able to fill all potential Japanese demand.

I don't see other international oil producers like the USSR, Romania or the Dutch East Indies following the American lead either. Latin American oil producers are a question mark. The US has a lot of leverage over them.

What happens to the Japanese economy and what next steps does the Japanese government contemplate?

Economically for the U.S., it loses its Japanese export market, which is bad for some oil producing areas. But does Allied purchasing of fuel and metals end up picking up most of the slack?

Does this US measure end up causing the Japanese difficulties they try to fix by military means? If so, when and where do the Japanese take additional military action? What emergency economic measures do they undertake in the interim?

In particular, once the the phony war turns to blitzkrieg, what do the Japanese do, if they have not done something already?
The likely outcome is the same as IOTL, but with less resources and much more hurry for Japanese. May be earlier assault on Hong Kong, because Japanese naval blockade of Southern China become more problematic. More likelihood (but yet far of assured) of Japan scrapping the parts of 1940-1942 campaigns and accelerating the remainers, may be even limiting it only to the assault of China, French Indochina and British colonies, leaving US and Dutch Indies in peace.

Do not forget, every country had its own motive forces, and these forces cannot be altered by small actions like shifting availability of some resource.
 
So, Japan can continue to import goods from the British Commonwealth and spend its sterling-denominated assets

I believe the Japanese had well soured relations with the CW countries by this time, such as blockading the British Concession at Tientsin in 1939, and wasn't worth pissing off the USA over this.

UK wanted the high octane avgas to keep flowing from the US.
 

raharris1973

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as long as the UK is not reselling US avgas or any avgas to Japan the US would not flip out over sale of lower grade petrol.

Tianjin is a double edged example, it also showed how undesirable a war with Japan was for Britain. Britain needed to worry most about keeping America happy in the long run. But in the short run Japan could do more to hurt The British Empire than America could do to help it.
 

raharris1973

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Trurle what is your logic in the Japanese electing to attack the British and French colonies in 1940? Tin, rubber and blockade?
 
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