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From a roleplay perspective, your army in Manchuria has just unilaterally started a war with China without your government's backing. This is also since the government of your country is reluctant to fully commit to the conflict for fear of how it might effect foreign relations.
Every month or so you can take a decision ("Escalate the War in China") to reduce the penalties by 10% (eventually eliminating them). Each step costs political power and increases the war support of the United States.
Hi guys, ty for the answer, i didnt realice i had to take the decisions now when i did the marco polo incident (yeah i dont play Japan much, i was trying to see how a invasion of britain in 36 would pan out, and decided to keep playing)