What if no US oil embargo/financial freeze on Japan starting in August 1941? Probable WWII outlook f
Jul 31, 2023 1:24:00 GMT
stevep and oscssw like this
Post by raharris1973 on Jul 31, 2023 1:24:00 GMT
In OTL, after the late July 1941 Japanese occupation of the Vichy French central and southern Indochina colonies, the United States froze all Japanese assets in US banks, essentially halting all remaining Japanese-American commerce. This 1 August executive order freezing Japanese dollar assets (and thus means of payment) theoretically left a door open to limited managed barter trade, but that option wasn't exercised, and the immediate halt to trade and commodity transactions for imports and American exports, including all petroleum products, remained in force for the remaining months of peace between Japan and the United States, and obviously into the period of war between the two countries.
This was not the first instance of US economic sanctions again Japan. In early October, 1940 the United States imposed an embargo on the export of steel and iron scrap to Japan, in response to Japan's late September of the Vichy French northern Indochina colonies, and likely also Japan's adherence to the Tripartite Pact with Nazi Germany and Fascist Italy.
While the October 1940 embargoes were the most significant up to that time, the US had been considering whether to use one form or another of economic sanctions to protest or impede the Japanese war effort in China for multiple years beforehand, but had been slow to undertake economic sanctions, especially, legally binding and broadly scoped embargoes or boycotts.
Nevertheless, to gain freedom of action to take economic sanctions, even if just in the form of higher tariff rates, against Japan, the US served its required six-months notice of intent to withdraw from the 1911 US-Japanese Commercial Treaty (regulating trade & tariffs) in July 1939. So from January 1940 onward, the US was free to pursue embargoes or boycotts or discriminatory tariffs against Japan without violating any ongoing treaty commitments. The US obviously did not instantly use that freedom to embargo considerable Japanese raw material purchases of American metals and petroleum products (hence why the later 1940 and '41 embargo actions were required) but did in early 1940 ban exports of high octane aviation gasoline to Japan and formally ban export of aircraft equipment.
Prior to the announced termination of US-Japanese Commercial Treaty, at some point in 1938 or 1939, President Roosevelt had asked US manufacturers to observe a 'moral embargo' by not selling aircraft, aircraft parts, and aircraft munitions such as bombs to nations, including Japan (but also Germany and Italy) that bombed civilian populations. The manufacturers largely complied and this eliminated the one small niche of the arms market where Japan, largely self-sufficient in weapons manufacture purchased military equipment from the US during Tokyo's war on China. It obvious did not control Japanese purchases of American raw-materials (petroleum, metals, fibers) however which surged in 1937 and 1938 to feed Japan's ongoing operations and military industries dedicated against China and its fleet reserve supplies.
To summarize the incremental increases of American economic pressure on Japan over its China and then broader East Asian (Indochina) aggression, they were:
1938-39 - Non-binding "moral embargo" on aircraft, aircraft parts, and aircraft munitions/bombs
1939 (July) - Notice of intent to terminate US-Japanese Commercial Treaty of 1911
1940 (Jan) - US-Japanese Commercial Treaty of 1911 terminated, US free to impose sanction, US bans export of high-octane/aviation gasoline [Japan can adapt at cost by purchasing lower grades and refining to higher grades domestically]
1940 (Oct) - US Embargo of steel and iron scrap exports to Japan
1941 (Aug) - US Freeze of Japanese financial assets and total embargo of oil (and all trade generally)
The August 1941 freeze/embargo put enormous pressure on Japan and time-sensitivity on its ambitions. By confronting the Japanese Empire with a fuel shortage in months, it made acquisition of dependable fuel sources closer at hand, in the East Indies, more imperative and more urgent from a Japanese point of view. Japan was less able to consider the possibility of striking north, striking south, or striking nowhere and seeing how the European war and China war played out, at its own leisure, now that it could not maintain or replenish its oil reserves internally, or now externally, by purchases in the Anglo-American monopolized trading and financial settlement system.
Japan broke out of the trap with its great southern offensive in Southeast Asia and the Western Pacific and the strike on Pearl Harbor. A doomed effort at self-sufficiency from the start, the Japanese were forced to admit defeat only in August 1945.
Before that time, from December 1941- through June 1942, Japanese forces made for quite a bright flash in the pan throughout greater East Asia, sweeping away hundreds of thousands of Allied garrison forces either long used to soft garrison duty or only hastily emplaced in the months preceding the attack. The Allied forces in the region leading up to December 1941 had been getting some reinforcement with men and machines, with many more scheduled on the way for subsequent months, whose transfer was interrupted by the onset of the Japanese attack. This trend was most pronounced for the American forces and possessions, with the 'Pensacola Convoy' intended to deliver more and better equipped US Army forces forces to the Philippines, and the raising of larger native forces within the Commonwealth of the Philippines itself. But some build-up, reinforcement or enhancement of equipment was slated to occur in some of the British Imperial possessions and Dominions as well, even if on a smaller scale.
Here is where I want to stop and introduce a what if. I contend that what he saw happen in Greater East Asia, 1941-1942 in OTL, was the western powers, led by the US, advancing its containment policy against Japan with multiple instruments, economic siege, military fortification of bases in the region like Singapore, and the Philippines with reinforcements of men, ships, defensive aircraft, and B-17 bombers, and, for the longer run, the American two-ocean Navy build-up, liable to produce a strong naval lead against Japan only starting by late 1943.
With the imposition of the total financial freeze/oil embargo, I would contend that the western economic warfare instrument took, a big, bold stride, out ahead of the much more slowly advancing and hardening military instruments of containment. By striding out ahead against Japan's economic jugular, the economic instrument got Japan's attention, but also exposed a vulnerability in doing so before the military protective aspects to contain the backlash were in place. Having stepped out front, with the soldiers and sailors behind, the west was overextended in an overwide stance, leaving it vulnerable to the hard Japanese kicks in thein the groin that were the series of defeats at Pearl Harbor, Wake, Guam, Manila, Bataan, Corregidor, Hong Kong, Malaya, Singapore, the Java Sea, Burma, Rabaul, Java and the like.
So the what if is this: What if, without changing the pace and circumstances of any other actors in World War Two, and without slowing down one bit the US fleet program and defensive preparations in the Pacific and consultation with potential Allies, we slow down the timeline of one variable, the variable of US (and Allied) economic sanctions on Japan?
The altered sanctions timeline starts diverges back in 1939, but has important results for WWII only in 1941 and 1942, here is how I imagine the new sanctions timeline:
1938-39 - Non-binding "moral embargo" on aircraft, aircraft parts, and aircraft munitions/bombs
1939 (July) - Nothing special happens in US-Japanese relations and there is no announced termination of US-Japanese Commercial Treaty.
1940 (Jan) - Nothing special happens in US-Japanese relations; the grind of the Sino-Japanese war is actually rather 'back-burner' news compared to the war in Europe
1940 (Oct) - Notice of intent to terminate US-Japanese Commercial Treaty of 1911 [in response to Japanese occupation of Northern Indochina & signing of Tripartite Pact]
1941 (Mar) - US-Japanese Commercial Treaty of 1911 terminated, US free to impose sanction, US bans export of high-octane/aviation gasoline [Japan can adapt at cost by purchasing lower grades and refining to higher grades domestically]
1941 (Aug) - Embargo of steel and iron scrap exports to Japan [in response to Japanese occupation of southern Indochina]; United States petroleum exports to Japan continue
Under these circumstances, the "idea" of a US Freeze of Japanese financial assets, or an embargo of oil exists, but only as a hypothetical "arrow" in the American policy quiver to use in the event of some future Japanese provocation matching or exceeding previous.
Japan is not on a raw materials-based, oil deprivation doomsday clock, from August 1941 onward. Where do things go from here?
Navy racing?
The Japanese are not in an entirely unpressured situation, by late 1941/early 1942 they will reach the point where from a combined quantitive and qualitative point of view, the American Fleet's margin of superiority over Japan's will be at its smallest in the foreseeable future. Current building trends would suggest that by late 1942 and 1942, the American fleet would *widen* its margin of superiority once more.
If Japanese leadership collectively, even before the embargo, had a sense that naval war with America at *some point* in the 1940s was inevitable, the optimal point was arriving fairly soon. But fuel shortages would not command it, and this pressure does not exist if courses of action other than war with America are considered equally valid.
For Japanese leaders more willing to wait on events, despite the ups and downs of naval ratios and specific regional balances, time can allow more developments to unfold from the winter of 1942 on that could make warring with the US and Allies look more risky, and betting on Hitler look more attractive.
For example, Soviet counter-offensives running from late December 1941 through March 1942 would likely be taken as sign of Soviet, and broader Allied, resiliency, and poorer long-term prospects for Hitler. So probably would British successes in the western desert front in North Africa around the same time.
The US-Nazi war potential?
However, how long beyond December 11th, 1941 would the United States and Germany remain in a state of limited, undeclared war at sea? Could the United States and Germany have persisted through the entirety of 1942, or even half of that year, in such a twilight state of naval cat and mouse and occasional death? Or would the USA or Germany have ultimately decided to declare war on the other, leading to, on the American side, a full mobilization and commitment of ground and air forces to fight against the Axis in Europe and Africa (not just the Navy fighting in the Atlantic) - and on the German side, an all-out submarine assault on American East Coast and Caribbean shipping?
The twilight naval war situation was growing increasingly intolerable for Hitler and US behavior increasingly provocative since the US in October had achieved Congressional consent to arm the merchant ships and to abolish the restrictive 'combat zones'. So the summer 1941 status quo where the US escorted convoys only as far as Iceland had eroded by the time October was over, and US lend-lease ships could journey all the way to Liverpool to drop off supplies.
Roosevelt had no guarantee of getting, and may not have even sought, a Congressional declaration of war over additional maritime clashes in the eastern Atlantic like the Greer, Kearny, and Reuben James had they happened in late December 1941 or early 1942. Congress, the public, or the President might have considered incidents like those 'the cost of doing business' in terms of aiding the Allies and not 'unprovoked German aggression. However, a change in German ROE and operational areas to do a campaign of repeated, unwarned sinkings right of US shores in the Atlantic and Caribbean like the historic operation Drumbeat would have been considered an escalation, a challenge to be matched by a US escalation, and a declaration of war.
And if, at any time, despite the maintenance of a tenuous Allied-Japanese peace in the Pacific, American-German, all-out, declared war begins, the Pacific situation can become immediately more complicated.
On the one hand Japan can try to use American embroilment as a diplomatic opportunity to test American flexibility on the status of China and other matters. The Americans, newly at all-out war with Germany, would not be pushovers for Japan in Far East talks, but may see wisdom in not forcing near-term confrontation on every possible point of disagreement.
On the other hand, in an all-out, declared war on Germany, involving the preparation of American cross-Atlantic invasion forces, American petroleum demand will skyrocket, calling in to question whether any American, or even western hemispheric petroleum production will be left over for export to Japan, or anyone else. Wartime pressures of a Euro-Atlantic war alone on America could lead America into a de facto oil embargo on Japan, even if it isn't meant to be "personal" or "malicious", and then Japan is forced back into its OTL dilemma. Additionally, aside from practical considerations, one should expect a degree of domestic political outcry if in a time of all-out war, mobilization and gas-rationing, it is still legal to export petroleum products to a non-Allied, non-friendly, suspicious and unpopular power like Japan, even if it is not a designated enemy.
Incremental Japanese offensive moves? And their effects
The Japanese, free of OTL's all-consuming concern of the American freeze/embargo, and their deadline to resolve it diplomatically by November or go to war, have freedom to take different actions of their own in this ATL where they are less sanctioned, not all of them benign.
For example, one 'productive' possible use of Japanese time and energy under these circumstances could be try a more definitive campaign to break Chinese resistance. It may not have much likelihood of succeeding. But if it does seem to be verging on success after some months, is the US policy on sanctions likely to remain constant, or would the US judge it needs to take all-out sanctions arrow and employ it to prevent China's final demise? Perhaps.
Or, the Japanese at some point in late 1941 or early 1942 could press one step further than French Indochina, and occupy Thailand, to acquire more direct control over its food and commodity resources, and to establish a more advantageous tactical position to threaten and pressure the British in Malaya, Singapore and Burma. Pressure could be desired to reduce or halt deliveries to China via the Burma road to increase incidents of 'banditry' affecting it. Thailand could be desirable to Japan from that point of view, and occupying it might not seem too crazy a risk given the limited scope of American embargoes so far. However, this creeping advance towards strategic territories of the British Empire, a linchpin member of anti-Hitler coalition, will demand some form of US counter-escalation whenever it occurs, possibly the full financial freeze/oil embargo.
A third option, one I consider quite unlikely, would be this less encumbered Japan striking north to attack the Soviet Union. I think it not likely because even lacking the pressures of the oil embargo, the Japanese were looking for conditions of greater superiority on the mutual border and greater proof of overall Soviet collapse than ever historically occurred. However, if the Japanese had precociously struck the Soviets in the back in 1941 or 1942 in this delayed American sanctions ATL, the USA would have almost immediately counter-escalated with a full financial freeze/oil embargo. This wouldn't be because FDR loving Communism or being controlled by it, but by his geopolitical calculation that Soviet Russia was a linchpin member of the anti-Hitler coalition, and Japan's attack is a highly unwelcome disruption to Roosevelt's global anti-Hitler strategy, so the Japanese disruptors would need to have *their* moves disrupted. Then the Japanese would have to figure if, and how, they can shift or divide their focus, or sequentially win, on the northern Soviet fronts and the southern Pacific fronts.
So with all the factors laid out here, if US sanctions was delayed a full step as described above, what do *you* think is the most likely outcome as we get to 1943?
The least impact would be the Japanese attacking the western powers at about the same time as OTL, just with having a few additional months worth of American petroleum products.
The most impact would be Japan and the USA still not at war by 1943, US Pacific defenses built up more strongly, and no further developments that caused full American sanctions on Japan; in Europe and the Atlantic it would be the US in a twilight naval war with Germans in the Atlantic, but not a declared war risking its ground troops and airmen on or over Europe and Africa, serving as the Arsenal and Quartermaster of British Empire and Soviet forces containing Nazi forces.
..and there's any number of impact levels in between.
This was not the first instance of US economic sanctions again Japan. In early October, 1940 the United States imposed an embargo on the export of steel and iron scrap to Japan, in response to Japan's late September of the Vichy French northern Indochina colonies, and likely also Japan's adherence to the Tripartite Pact with Nazi Germany and Fascist Italy.
While the October 1940 embargoes were the most significant up to that time, the US had been considering whether to use one form or another of economic sanctions to protest or impede the Japanese war effort in China for multiple years beforehand, but had been slow to undertake economic sanctions, especially, legally binding and broadly scoped embargoes or boycotts.
Nevertheless, to gain freedom of action to take economic sanctions, even if just in the form of higher tariff rates, against Japan, the US served its required six-months notice of intent to withdraw from the 1911 US-Japanese Commercial Treaty (regulating trade & tariffs) in July 1939. So from January 1940 onward, the US was free to pursue embargoes or boycotts or discriminatory tariffs against Japan without violating any ongoing treaty commitments. The US obviously did not instantly use that freedom to embargo considerable Japanese raw material purchases of American metals and petroleum products (hence why the later 1940 and '41 embargo actions were required) but did in early 1940 ban exports of high octane aviation gasoline to Japan and formally ban export of aircraft equipment.
Prior to the announced termination of US-Japanese Commercial Treaty, at some point in 1938 or 1939, President Roosevelt had asked US manufacturers to observe a 'moral embargo' by not selling aircraft, aircraft parts, and aircraft munitions such as bombs to nations, including Japan (but also Germany and Italy) that bombed civilian populations. The manufacturers largely complied and this eliminated the one small niche of the arms market where Japan, largely self-sufficient in weapons manufacture purchased military equipment from the US during Tokyo's war on China. It obvious did not control Japanese purchases of American raw-materials (petroleum, metals, fibers) however which surged in 1937 and 1938 to feed Japan's ongoing operations and military industries dedicated against China and its fleet reserve supplies.
To summarize the incremental increases of American economic pressure on Japan over its China and then broader East Asian (Indochina) aggression, they were:
1938-39 - Non-binding "moral embargo" on aircraft, aircraft parts, and aircraft munitions/bombs
1939 (July) - Notice of intent to terminate US-Japanese Commercial Treaty of 1911
1940 (Jan) - US-Japanese Commercial Treaty of 1911 terminated, US free to impose sanction, US bans export of high-octane/aviation gasoline [Japan can adapt at cost by purchasing lower grades and refining to higher grades domestically]
1940 (Oct) - US Embargo of steel and iron scrap exports to Japan
1941 (Aug) - US Freeze of Japanese financial assets and total embargo of oil (and all trade generally)
The August 1941 freeze/embargo put enormous pressure on Japan and time-sensitivity on its ambitions. By confronting the Japanese Empire with a fuel shortage in months, it made acquisition of dependable fuel sources closer at hand, in the East Indies, more imperative and more urgent from a Japanese point of view. Japan was less able to consider the possibility of striking north, striking south, or striking nowhere and seeing how the European war and China war played out, at its own leisure, now that it could not maintain or replenish its oil reserves internally, or now externally, by purchases in the Anglo-American monopolized trading and financial settlement system.
Japan broke out of the trap with its great southern offensive in Southeast Asia and the Western Pacific and the strike on Pearl Harbor. A doomed effort at self-sufficiency from the start, the Japanese were forced to admit defeat only in August 1945.
Before that time, from December 1941- through June 1942, Japanese forces made for quite a bright flash in the pan throughout greater East Asia, sweeping away hundreds of thousands of Allied garrison forces either long used to soft garrison duty or only hastily emplaced in the months preceding the attack. The Allied forces in the region leading up to December 1941 had been getting some reinforcement with men and machines, with many more scheduled on the way for subsequent months, whose transfer was interrupted by the onset of the Japanese attack. This trend was most pronounced for the American forces and possessions, with the 'Pensacola Convoy' intended to deliver more and better equipped US Army forces forces to the Philippines, and the raising of larger native forces within the Commonwealth of the Philippines itself. But some build-up, reinforcement or enhancement of equipment was slated to occur in some of the British Imperial possessions and Dominions as well, even if on a smaller scale.
Here is where I want to stop and introduce a what if. I contend that what he saw happen in Greater East Asia, 1941-1942 in OTL, was the western powers, led by the US, advancing its containment policy against Japan with multiple instruments, economic siege, military fortification of bases in the region like Singapore, and the Philippines with reinforcements of men, ships, defensive aircraft, and B-17 bombers, and, for the longer run, the American two-ocean Navy build-up, liable to produce a strong naval lead against Japan only starting by late 1943.
With the imposition of the total financial freeze/oil embargo, I would contend that the western economic warfare instrument took, a big, bold stride, out ahead of the much more slowly advancing and hardening military instruments of containment. By striding out ahead against Japan's economic jugular, the economic instrument got Japan's attention, but also exposed a vulnerability in doing so before the military protective aspects to contain the backlash were in place. Having stepped out front, with the soldiers and sailors behind, the west was overextended in an overwide stance, leaving it vulnerable to the hard Japanese kicks in thein the groin that were the series of defeats at Pearl Harbor, Wake, Guam, Manila, Bataan, Corregidor, Hong Kong, Malaya, Singapore, the Java Sea, Burma, Rabaul, Java and the like.
So the what if is this: What if, without changing the pace and circumstances of any other actors in World War Two, and without slowing down one bit the US fleet program and defensive preparations in the Pacific and consultation with potential Allies, we slow down the timeline of one variable, the variable of US (and Allied) economic sanctions on Japan?
The altered sanctions timeline starts diverges back in 1939, but has important results for WWII only in 1941 and 1942, here is how I imagine the new sanctions timeline:
1938-39 - Non-binding "moral embargo" on aircraft, aircraft parts, and aircraft munitions/bombs
1939 (July) - Nothing special happens in US-Japanese relations and there is no announced termination of US-Japanese Commercial Treaty.
1940 (Jan) - Nothing special happens in US-Japanese relations; the grind of the Sino-Japanese war is actually rather 'back-burner' news compared to the war in Europe
1940 (Oct) - Notice of intent to terminate US-Japanese Commercial Treaty of 1911 [in response to Japanese occupation of Northern Indochina & signing of Tripartite Pact]
1941 (Mar) - US-Japanese Commercial Treaty of 1911 terminated, US free to impose sanction, US bans export of high-octane/aviation gasoline [Japan can adapt at cost by purchasing lower grades and refining to higher grades domestically]
1941 (Aug) - Embargo of steel and iron scrap exports to Japan [in response to Japanese occupation of southern Indochina]; United States petroleum exports to Japan continue
Under these circumstances, the "idea" of a US Freeze of Japanese financial assets, or an embargo of oil exists, but only as a hypothetical "arrow" in the American policy quiver to use in the event of some future Japanese provocation matching or exceeding previous.
Japan is not on a raw materials-based, oil deprivation doomsday clock, from August 1941 onward. Where do things go from here?
Navy racing?
The Japanese are not in an entirely unpressured situation, by late 1941/early 1942 they will reach the point where from a combined quantitive and qualitative point of view, the American Fleet's margin of superiority over Japan's will be at its smallest in the foreseeable future. Current building trends would suggest that by late 1942 and 1942, the American fleet would *widen* its margin of superiority once more.
If Japanese leadership collectively, even before the embargo, had a sense that naval war with America at *some point* in the 1940s was inevitable, the optimal point was arriving fairly soon. But fuel shortages would not command it, and this pressure does not exist if courses of action other than war with America are considered equally valid.
For Japanese leaders more willing to wait on events, despite the ups and downs of naval ratios and specific regional balances, time can allow more developments to unfold from the winter of 1942 on that could make warring with the US and Allies look more risky, and betting on Hitler look more attractive.
For example, Soviet counter-offensives running from late December 1941 through March 1942 would likely be taken as sign of Soviet, and broader Allied, resiliency, and poorer long-term prospects for Hitler. So probably would British successes in the western desert front in North Africa around the same time.
The US-Nazi war potential?
However, how long beyond December 11th, 1941 would the United States and Germany remain in a state of limited, undeclared war at sea? Could the United States and Germany have persisted through the entirety of 1942, or even half of that year, in such a twilight state of naval cat and mouse and occasional death? Or would the USA or Germany have ultimately decided to declare war on the other, leading to, on the American side, a full mobilization and commitment of ground and air forces to fight against the Axis in Europe and Africa (not just the Navy fighting in the Atlantic) - and on the German side, an all-out submarine assault on American East Coast and Caribbean shipping?
The twilight naval war situation was growing increasingly intolerable for Hitler and US behavior increasingly provocative since the US in October had achieved Congressional consent to arm the merchant ships and to abolish the restrictive 'combat zones'. So the summer 1941 status quo where the US escorted convoys only as far as Iceland had eroded by the time October was over, and US lend-lease ships could journey all the way to Liverpool to drop off supplies.
Roosevelt had no guarantee of getting, and may not have even sought, a Congressional declaration of war over additional maritime clashes in the eastern Atlantic like the Greer, Kearny, and Reuben James had they happened in late December 1941 or early 1942. Congress, the public, or the President might have considered incidents like those 'the cost of doing business' in terms of aiding the Allies and not 'unprovoked German aggression. However, a change in German ROE and operational areas to do a campaign of repeated, unwarned sinkings right of US shores in the Atlantic and Caribbean like the historic operation Drumbeat would have been considered an escalation, a challenge to be matched by a US escalation, and a declaration of war.
And if, at any time, despite the maintenance of a tenuous Allied-Japanese peace in the Pacific, American-German, all-out, declared war begins, the Pacific situation can become immediately more complicated.
On the one hand Japan can try to use American embroilment as a diplomatic opportunity to test American flexibility on the status of China and other matters. The Americans, newly at all-out war with Germany, would not be pushovers for Japan in Far East talks, but may see wisdom in not forcing near-term confrontation on every possible point of disagreement.
On the other hand, in an all-out, declared war on Germany, involving the preparation of American cross-Atlantic invasion forces, American petroleum demand will skyrocket, calling in to question whether any American, or even western hemispheric petroleum production will be left over for export to Japan, or anyone else. Wartime pressures of a Euro-Atlantic war alone on America could lead America into a de facto oil embargo on Japan, even if it isn't meant to be "personal" or "malicious", and then Japan is forced back into its OTL dilemma. Additionally, aside from practical considerations, one should expect a degree of domestic political outcry if in a time of all-out war, mobilization and gas-rationing, it is still legal to export petroleum products to a non-Allied, non-friendly, suspicious and unpopular power like Japan, even if it is not a designated enemy.
Incremental Japanese offensive moves? And their effects
The Japanese, free of OTL's all-consuming concern of the American freeze/embargo, and their deadline to resolve it diplomatically by November or go to war, have freedom to take different actions of their own in this ATL where they are less sanctioned, not all of them benign.
For example, one 'productive' possible use of Japanese time and energy under these circumstances could be try a more definitive campaign to break Chinese resistance. It may not have much likelihood of succeeding. But if it does seem to be verging on success after some months, is the US policy on sanctions likely to remain constant, or would the US judge it needs to take all-out sanctions arrow and employ it to prevent China's final demise? Perhaps.
Or, the Japanese at some point in late 1941 or early 1942 could press one step further than French Indochina, and occupy Thailand, to acquire more direct control over its food and commodity resources, and to establish a more advantageous tactical position to threaten and pressure the British in Malaya, Singapore and Burma. Pressure could be desired to reduce or halt deliveries to China via the Burma road to increase incidents of 'banditry' affecting it. Thailand could be desirable to Japan from that point of view, and occupying it might not seem too crazy a risk given the limited scope of American embargoes so far. However, this creeping advance towards strategic territories of the British Empire, a linchpin member of anti-Hitler coalition, will demand some form of US counter-escalation whenever it occurs, possibly the full financial freeze/oil embargo.
A third option, one I consider quite unlikely, would be this less encumbered Japan striking north to attack the Soviet Union. I think it not likely because even lacking the pressures of the oil embargo, the Japanese were looking for conditions of greater superiority on the mutual border and greater proof of overall Soviet collapse than ever historically occurred. However, if the Japanese had precociously struck the Soviets in the back in 1941 or 1942 in this delayed American sanctions ATL, the USA would have almost immediately counter-escalated with a full financial freeze/oil embargo. This wouldn't be because FDR loving Communism or being controlled by it, but by his geopolitical calculation that Soviet Russia was a linchpin member of the anti-Hitler coalition, and Japan's attack is a highly unwelcome disruption to Roosevelt's global anti-Hitler strategy, so the Japanese disruptors would need to have *their* moves disrupted. Then the Japanese would have to figure if, and how, they can shift or divide their focus, or sequentially win, on the northern Soviet fronts and the southern Pacific fronts.
So with all the factors laid out here, if US sanctions was delayed a full step as described above, what do *you* think is the most likely outcome as we get to 1943?
The least impact would be the Japanese attacking the western powers at about the same time as OTL, just with having a few additional months worth of American petroleum products.
The most impact would be Japan and the USA still not at war by 1943, US Pacific defenses built up more strongly, and no further developments that caused full American sanctions on Japan; in Europe and the Atlantic it would be the US in a twilight naval war with Germans in the Atlantic, but not a declared war risking its ground troops and airmen on or over Europe and Africa, serving as the Arsenal and Quartermaster of British Empire and Soviet forces containing Nazi forces.
..and there's any number of impact levels in between.
