Abstract: How can a country engage economically with an adversary while preventing that adversary from using the resulting economic power against it? Under what conditions can such engagement succeed? We develop a dynamic model of trade and political conflict between a dominant country and a weaker country. Trade benefits both countries but also increases the weaker country's future capacity to pursue more aggressive policies. Absent an agreement, the outcome is all-or-nothing: the dominant country either trades indefinitely while tolerating policy divergence or refuses to trade altogether. We show that a self-enforcing, informal agreement can sustain an intermediate outcome in which trade continues while the weaker country limits political divergence. Such an agreement is maintained by the dominant country's ability to threaten the temporary suspension of trade following political deviation. It is sustainable only under two conditions: the weaker country must value trade sufficiently to accept policy concessions, and, counterintuitively, the dominant country must not value trade too highly, or its threat to suspend trade is no longer credible.