The thing is that the Thalans are highly belligerent, If they have a bigger military than you, then they will attack you (after extorting you, maybe).
Same thing with the Arceans. Both of them tend to be heavy on the military.
Here is a hint when fighting the Thalans:
Invest heavily in Shield Technology. The Thalans seem to never use anything else but beam weapons so getting thick enough shields will help against them.
Beware though, they have the powerful technology known as the Disruptor Beam Weapon. Once they are out, then prepare for some serious hurt and noise (seriously, the sound effects for them are too loud!)