On 11 May 1939, the day after the Credit Agreement, the Soviet Union went to war against Japan in a successful four-week military campaign in the Far East.

Germany lacks natural resources, including several key raw materials needed for economic and military operations.

[9][10] Even with rising tensions, in the mid-1930s, the Soviet Union made repeated efforts to reestablish closer contacts with Germany.,[11] which were rebuffed by Hitler, who wished to steer clear of such political ties.

[22] On April 7, Soviet diplomat Georgii Astakhov stated to the German Foreign Ministry that there was no point in continuing the German–Soviet ideological struggle and that the two countries could come to an agreement.

[23] Ten days later, Soviet ambassador Alexei Merekalov met with German State Secretary Ernst Weizsacker and presented him a note requesting speedy removal of any obstacles for fulfillment of military contracts signed between Czechoslovakia and the USSR before the former was occupied by Germany.

[24] According to German accounts,[25] at the end of the discussion the ambassador stated "there exists for Russia no reason why she should not live with us on a normal footing.

[28] German planners in April and May 1939 feared that a cessation of Swedish trade would cut key iron ore supplies.

[29] In the context of further economic discussions, on May 17, Astakhov told a German official that he wanted to restate "in detail that there were no conflicts in foreign policy between Germany and Soviet Russia and that therefore there was no reason for any enmity between the two countries.

"[31] On May 26, German officials feared a potential positive result to come from the Soviets talks regarding proposals by Britain and France.

"[39] On August 1, the Soviets raised two conditions before political negotiations could begin: a new economic treaty and the cessation of anti-Soviet attacks by German media.

[39] Two days later, German Foreign Minister Joachim von Ribbentrop outlined a plan where the countries would agree to nonintervention in the others' affairs and would renounce measures aimed at the others' vital interests[40] and that "there was no problem between the Baltic and the Black Sea that could not be solved between the two of us.

[46] The Wehrmacht High Command issued a report that Germany could only be safe from a blockade on the basis of close economic cooperation with the Soviet Union.

[49] When TASS published a report that the Soviet–British–French talks had become snarled over the Far East and "entirely different matters"[clarification needed], Germany took it as a signal that there was still time and hope to reach a Soviet–German deal.

[2][50][52] Under the agreement, Germany also granted the Soviet Union a merchandise credit of 200 million ℛ︁ℳ︁ over seven years to be financed by the German Gold Discount Bank.

[53] The credit was to be used to finance Soviet "new business"[50] orders in Germany to include machinery, manufactured goods, war materials and hard currency.

[53] However, the agreement contained a "Confidential Protocol" providing that the German government would refund 0.5% of the interest, making the effective rate 4.5%.

[2] German Foreign Ministry official Karl Schnurre noted at the time that "[t]he movement of goods envisaged by the agreement might therefore reach a total of more than 1 billion Reichsmarks for the next few years.

"[55] Molotov wrote in Pravda that the August 19 deal was "better than all earlier treaties" and "we have never managed to reach such a favorable economic agreement with Britain, France or any other country.

"[2] Early in the morning of August 24, the Soviet Union and Germany signed the political and military deal that accompanied the trade agreement, the Molotov–Ribbentrop Pact.

[56] It contained secret protocols dividing the states of Northern and Eastern Europe into German and Soviet "spheres of influence.

[57] At the signing, Ribbentrop and Stalin enjoyed warm conversations, exchanged toasts and further addressed the prior hostilities between the countries in the 1930s.

"[59] In 2010, Timothy Snyder linked the improvement in Nazi-Soviet relations in 1939 to Stalin's objective of disrupting the Anti-Comintern Pact and waging war on Japan.

Ribbentrop made for Moscow, where, as both Orwell and Koestler noted, swastikas adorned the airport of the capital of the homeland of socialism.

[63] In October three German trade partners - Baltic States – Estonia, Latvia, and Lithuania – were given no choice but to sign a so-called Pact of defense and mutual assistance which permitted the Soviet Union to station troops in them.

[65] Several German merchant ships were damaged[66] Germany and the Soviet Union continued economic, military and political negotiations throughout the last half of 1939, which resulted in a much larger German–Soviet Commercial Agreement was signed on February 11, 1940.

[67][68] Under that agreement, the Soviet Union became a major supplier of vital materials to Germany, including petroleum, manganese, copper, nickel, chrome, platinum, lumber and grain.

[69] They also received considerable amounts of other vital raw materials, including manganese ore,[68][70] along with the transit of one million tons of soybeans from Manchuria.