A new chapter in Swedish–Japanese relations began in the summer months of 1937, when the outbreak of all-out warfare between Japan and China left Sweden with only few options. It could either choose to continue along the same path as it did in the Manchurian and Abyssinian crises, working through the League and pushing for resolute collective security measures, or it could choose to invoke traditional Swedish neutrality to avoid a new confrontation. The formal standpoint of the Swedish Government crystalized only over time. Although officially Sweden put the blame for the warfare in China squarely at the feet of Japan, Swedish society was divided. While many in the general public were shocked at the violence with which Chinese civilians in cities were bombed and tried to organize a boycott movement, the business community was still supporting the Japanese viewpoint that the lawlessness of China was mainly to blame for the tragedies. International events around the unsuccessful attempts to punish Italy for its attacks on Abyssinia and the Spanish Civil War led to a change of hearts in Swedish diplomacy. It gave up all confrontation with Japan and tried to rekindle the relationship, grudgingly accepting that might could make right. However, also the backbone of Swedish–Japanese relations, trade, started to suffer from 1937 onwards. While imports stagnated, exports fell quickly as not only the security situation in Asia deteriorated but Japan began to nationalize parts of its economy and demanded more reciprocity in trade. Ideological nationalism had reached the business world.