As Union’s fleet departs in 3000U to deal with the Deimos Event, Karrakis' New Federation government steps down, and is replaced by a new government, operating largely along the same organizational principles as the short lived New Feds. This government is composed of the heads of each house as a nod to their homeworld, a move meant to reemphasize the unity they ultimately shared. In 3200U the new government, to cheers and fanfare, declared itself the Federated Baronic State of Karrakis and Her Colonies. Less formally, it comes to be known as the Karrakin Trade Baronies.
Union's Second Committee, reeling from the trauma of the Deimos Event, seeks a way to assert itself in the face of the existential threat, and finds one where it left it: Karrakis. Utilizing the first NHPs to pilot heavily autonomous ships, Union moves to secure Karrakis. With the Baronies still recovering from the decimation of their fleets and shipyards, a second Union-Baronic war simply never happens.
Negotiations are swift, as both sides realize the possibility of profit -- Union agrees to assist in expanding Karrakin infrastructure, in exchange for the Barons agreeing to cease building their fleet. The Second Committee guarantees the Barons will remain heads of their houses and state, so long as they agree to keep Union in supply from their vast material wealth. The Baronies find this agreement profitable. War, for the Barons, made them appear powerful, but was costly, and less profitable than peace and trade. To win without death by capturing markets was the ultimate coup.