@Adiloi Yes, theoretically this could continue. But the Axis would gain so much income from this exchange that the Allies would not recover, and eventually attrition will stop UK from being able to retake since they won’t be able to buy new units and Germany will.
Of course it can. It makes no difference that originally it was a neutral territory. Its current status is a territory of the United States and therefore, with an IPC value of two,it can be a location where a minor industrial complex can be placed.
@The-General-0 A quick US liberation of London assumes the German navy and its transports have been eliminated.Italy can throw a wrench into the allies plans as well.