Final answer:
The XYZ affair involved the United States and France, where French diplomats demanded bribes and loans from American envoys for treaty negotiations, leading to public outrage and the Quasi-War.
Step-by-step explanation:
The XYZ affair involved diplomatic relations between the US and France. This incident occurred during John Adams’ presidency when American envoys were sent to France to negotiate a treaty to protect American shipping. However, negotiations turned scandalous when the French diplomats, referred to as X, Y, and Z in correspondence, demanded substantial loans (in Dutch currency) and a £50,000 bribe just to begin treaty discussions. The public exposure of this bribery attempt caused a huge outrage in the United States and turned public opinion against France, further escalated into what is known as the Quasi-War.