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This is a good question, but I would challenge the way the question is asked. The question can be a false binary. Let me explain. Inter-cultural contact can enhance cultural differences to the point where there is uneasiness. Conflict would be the more extreme example. An example would be an embargo and hefty taxes.
Inter-cultural contact may also absorb cultural differences as well. In fact, a whole culture may be absorbed into another. Assimilation to the dominant power structure is a real possibility. However, most likely there will be some negotiation. Inter-cultural contact has a way of both enhancing and absorbing cultural differences. In the end, both cultures are left changed and transformed a bit. This is the most likely scenario.
Let me give you an example, when Japan started selling cars in the United States, this interaction changed both Japan and the United States.
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