It was supposed to be the war to end all wars, and when the guns fell silent after the end of the Weltkrieg, for a period of 4 months it seemed like it might be so. But now thirty years later, China, the USA, Britain, and Russia must ally against the fascists in Berlin and Tokyo. If they don't kill each other first. Fortunately, President Flora Hamburger is ready and willing to show the Kaiser why you don't piss off a Jew from the East Side.
The world diverged with a Confederate victory at Antietam, but consequences soon rapidly diverged. America's defeat was viewed by the British Upper Class as a victory for the foes of democracy and liberalism, and Britain's descent into an authoritarian, paternalistic state soon began. With its economic nationalism and desire to maintain the balance of power, warm relations with the Confederacy ultimately blossomed into an alliance and military ties, although trade (and investment) continued to flow between the USA and UK. America turned to the Kaiserreich for an alliance, and the rest, they say, is history. American industrialization continued; the USA, with a stronger banking system (the panic of 1862 led to an earlier Federal Reserve, in the form of the 3rd Bank of the United States) prospered without Dixieland.
But the CSA also developed into a pretty nice place to live, if you were a certain sort of person. As William Faulkner would reflect, "the citizen of New Orleans could order by telephone, sipping his morning coffee, the products of the whole Earth, and expect delivery upon his doorstep. He could adventure his wealth in the resources of any enterprise in any quarter of the world. He dressed in fine fabrics from Raleigh or Paris, drove a Vauxhall, and envied no man." And when you read his words, and realize who he does not consider a citizen, you realize the rotting fruit that would cause the Confederacy's collapse.
The pipelines that carried oil for the citizen's Vauxhall was laid by black labor. The coffee from Cuba that the citizen drinks was harvested with black labor. The cotton for his clothing was picked with black labor. The true extent of black labor in the south is not apparent to the typical European; but they are there, ever present and ever repressed. And then of course there is prison labor, which maintains the Confederacy's excellent roads and parks. Although free, their labor was still bought and sold by contractors, and contracted out as needed. Although it was not illegal to be literate, there was no public school for blacks in all of the south. To travel, needed a passbook, and being in certain buildings, or even be on certain streets, blacks needed passbooks. Not having one, was a sure way to be arrested; and from there, it was a short step to being one more of the prison laborers who keep the Confederacy's paved roads so clean.
The blacks of Dixieland were a people in bondage; and they found their prophet in Marx and Lincoln. And thus, when the Great War Came, the Confederacy's fate was sealed before the first shot was fired.
The War To End All Wars
If you were an idiot, the cause of the Great War was obvious. Perfidious Albion had allied with the Rebs to keep America down; the Damnyankees were bent on conquering the Confederacy once again, etc. The problem is that we now know that this is stupid. Far from being a planned and eager event, the extension of the Great War to North America was something the British were desperate at all costs to avoid. (Given the fate of the British Isles, who can blame them?)
Anglo-Union relations during this period were complex; The United States remained one of the biggest recipients of British investment  and trading partners. And, while the United States in 1862 was significantly weaker than the British, the United States of 1914 was actually stronger in many ways; with a larger, more modern industrial sector, a powerful navy, and, most ominously, a stranglehold on the British Isles food supply.  While President Roosevelt's military lacked the global reach of the British Empire, more than a few in Whitehall were unsure of why, exactly, they were allied to the Confederacy given the consequences. 
German-Union ties have also been greatly exaggerated. It is true that Von Schlieffen first conceived the Schlieffen Plan while a military attache during the second Mexican War, and it is true that the Union sent staff officers to Berlin to learn from the Reichsheer, but this does not mean the two were fixed friends and allies. After all, the Japanese also sent officers to Berlin to learn, and this did not prevent Japan from seizing Germany's Pacific Colonies. America and Germany were willing to conduct joint naval exercises, but beyond this? Germany did not envisage a war with Britain until it broke out. To imagine call Germany and the United States allied powers is, thus, absurd.
So how did war come to pass? The way it always does. Through a tragedy of errors. President Roosevelt was elected in 1912 on a policy of muscular nationalism, responding to Confederate provocations along the western border and on the Ohio River.  This entailed military buildups, and Vice President Du Bois, who for some reason was never invited to the Confederate embassy's balls. And this meant that the Confederacy responded with its own pissant gestures, like shooting some "Marxists" from Yankeeland. (They were Marxist insurrectionaries, but the proper term in America is "Son of Liberty".)
Yet when Archduke Franz Ferdinand was assassinated and it became clear that Germany was going to go to war, Roosevelt's first action was to reiterate that the U.S. supported freedom of the seas, but would take no part in a purely European quarrel. This changed when Germany invaded Belgium. Before Congress, Roosevelt lamented the fate of Belgium, but declared that, " When giants are engaged in a death wrestle, as they reel to and fro they are certain to trample on whomever gets in the way. Germany would have faced disaster if she had not acted resolutely in Belgium. As Americans, we can look on at a war that is not our own and wish our friends in Europe a swift victory. But this is not our war."
Even if it wasn't Americans war, it was America's time to profit, and Roosevelt affirmed that the United States had the right to trade with hostile powers and upheld the freedom of the seas. Any blockade of belligerents or attacks on American shipping on the open seas would be an act of war. Ordering the United States Navy to sea on August 6, he made it clear that any hostile acts would be an act of war.
Enter President Wilson, President Wilson, a Confederate Whig who might have made an excellent professor and peacetime president. Wilson interpreted Roosvelt's actions as signs of Union preparation to intervene in the Great War on the side of Germany, and in a public declaration he warned that "the Confederacy stands by those who stood by us. Unless Roosevelt backs down, he shall find that the little nations will win yet another war." With the gauntlet thrown down, Roosevelt was unwilling to back off, and so the U.S. began to mobilize. And so the C.S. began to mobilize.
And the next thing you know, the dashing Confederate plan to invade on the same route they'd used fifty years ago crashed on heavy artillery and machine guns, while Union forces crossed into Canada. The Quebecois, whose protests stymied Canadian efforts at conscription, , opposed the declaration of war and walked out of the Parliament in Ottawa. In the south, the rebel plan of "attack, attack, attack" turned into a meatgrinder in Delaware.  Union artillery and numbers ensured that by the spring of 1915 most of Kentucky had fallen, and then things got worse.
Not all Confederate Negros were Marxists, and they were governed by a police state whose brutality was rivaled only by its structural flaws because it assumed that Africans were idiots. Nevertheless, Negroes played a prominent role in the Confederate war effort, and Marxist Confederates had a dream. Not of a Negro Commune, as the Confederates feared. Something far, far worse.
The Reunited States of America
America's Negroes were influenced by the gospel of Marx and Lincoln; but they had their own thinkers as well across the Ohio and Potomac. Men like the Anarchsyndicalist Booker T. Washington, who grew up in a land where where the Constitution had been amended to assure their equality; where yellow papers had printed stories of Negro women drowning as they tried to cross the Ohio, to save themselves from a fate worse than death; where Negroes not only received the same right to education that all Americans did, but could attend the highest schools and be vice president or Congressional representatives.  And so the flag that rose over the black quarters of the Confederacy was not just the red flag, though that was present; it was the flag of the United States of America, with stars for every state lost to secession. 
Unfortunately, the Confederate counterrevolution had all the viciousness you'd expect from a race war, and while the Confederate front lines buckled, then collapsed under the strain, the USA found itself drawn into a morass of racial conflict and ethnic cleansing. By the end of 1916, United States troops wet their feet in the Gulf of Mexico for the first time in sixty years. But it would be Teddy Roosevelt who decided what to do about it. 
By the end of 1916, the situation for the Entente in Europe was desperate. The German victory in the Battle of Verdun let the Germans place Paris under their guns, while both French and British families went hungry due to the Anglo-American war.  Russia fared little better, as the Brusilov Offensive bogged down and left the Russians defending Riga from the German armies. The Central Powers were barely any better off; the Austrio-Hungarian army had been gutted by Brusilov, its people were eating potatoes and roof rabbit, and the Czechs were making ominous noises about autonomy and wondering what the Germans were doing everywhere. In Germany, 1916 was known as the "hunger winter" and and all of the parties were willing to listen to Roosevelt's calls for a peace conference in Philadelphia; the home of the only power to triumph unmistakably from the war. 
The Treaty of Philadelphia showed how the world had changed, as the nations of Europe came to America to discuss peace. Yet all of left vaguely unsatisfied. Germany gained control of a reforged kingdom of Poland, a United Duchy of the Baltic, and Belgium, but the British lost nothing, and Germany only gained the Congo by agreeing to refrain from territorial demands against France. Russia's diplomats soon received word that the Tsar had been overthrown and replaced with a Provisional government; and within a few weeks the Russian Revolution would begin. 
Still, after three years of war, the guns fell silent. Most of them. For now, Roosevelt turned to his greatest task: winning the peace, and turning Confederates into Americans.
The world would need every American it could get, to beat the dragons.
 One of the things that always bugged me was that someone in the admiralty wasn't looking down the barrel of a pistol at the thought of a German-American alliance during this period. I mean, really?
I actually don't know if the British Isles would have been able to feed themselves during the war, but I suspect that with the loss of America, the potential loss of Canada, and whatever raiders the US put to sea to threaten Argentine convoys, the potential would be. Um. Awful?
 Balance of power! And the reason we need this balance of power is because the USA is because...
I will say that any readers who want to wave tiny American flags can do so.
 Turtledove cast the USA as being very racist and angry at blacks for
their defeat, to the point that Robert Gould Shaw is an senile racist at the end. Yea. That's one way for it to go. Care to speculate on the more probable way the US would treat blacks that made it north after the war? Especially since there aren't likely to be that many of them?
One of the things that always miffed me about the series was that the Confederates are ubermen, capable of defeating the better educated, more industrialized Yankees. Because otherwise the series would suck. This scenario posits that it isn't happen
Anecdotal sources state that General Stuart II became a bit acerbic and depressed after observing the results of a 1906 wargame, complaining that
"We did this before, that's was so fucked up. I know the Yankees haven't had a competent general since a Virginian led them but let's not pretend they're that stupid." Stuart would grapple with bouts of depression that OTL readers might find analogous to those which gripped Moltke the Younger, if Moltke had had to deal with a Russia that was even more modernized than Germany.
 Okay, this only happens in New England. And in the United State of Santo Domingo.
 Plus Sonora and Cuba.
 Or as Teddy Roosevelt said when visiting Memphis in 1917, "Once upon a time, when a Virginian and a New Yorker called themselves Americans, it meant something. And so it shall again."
He was shot during the speech, and being Teddy fucking Roosevelt, finished it before receiving medical treatment. When asked why, he merely quipped, "What, did the Rebs think they're the only men in America?"
 The British relied on North America to provide about 50% of their calories in OTL's 1914. I don't see a way to replace that by just saying "Argentina! Brazil!"
 There was actually starvation in Belgium in 1914 ATL, as America was unable to send any aid to the continent.
 But it's not Brest-Litovsk. Get it? This was an incredibly unlikely series
of events and it's basically impossible to get the Soviet border created by that Treaty and get a German victory. Deal with it.
Definitely exciting! The CSA/South has had a profile very similar to Brazil in the 19th c. (with thousands of the former even moving to the latter), but even less united. I do think that Baja and even Anglo-Canada would go into the US, especially with a British Lenin and a delayed surge in Anglo-Saxonism/Imperial Federalism (1890s OTL). OTL US introduced the Pledge of Allegiance after Reconstruction was ended, and it'd look a little more Preussisch before and after the Great War-192. This'd clash with the Populists, Socialists, and Reds, but a democratic left would enter the New Deal even stronger than OTL, just in time to defend Spain, Britain, France, and insurgent Milan against fascism and Kornilovism. Or something.
Leadership by even a hundred donkeys wouldn't matter if they had 3 million lions facing the CS forces--who'd be mostly experienced at 1) crushing indenturees and Mexican Apaches and 2) picking on little Golden Circle states. Recall that in 1969 the Salvadoran paramilitaries thought they'd be in Tegucigalpa by sundown, but couldn't even take a whole departamento. Honestly the CSA would have to stay out of the war if someone wanted a Southron Hitler (who would be nothing like Hitler...).