Having lost patience with China, the Trump administration is studying new steps to starve North Korea of cash for its Nuclear programme, including an option that would infuriate Beijing: sanctions on Chinese companies that help keep the North’s economy afloat.
It’s an approach that’s paid off for the US in the past, especially with Iran, where American economic penalties helped drive Tehran to the nuclear negotiating table. Yet there are significant risks, too, including the possibility of opening a new rift with Beijing that could complicate US diplomatic efforts on other critical issues.
The renewed look at “secondary sanctions” comes as Washington seeks a forceful response to North Korea’s test this week of an intercontinental ballistic missile that could strike the United States. Few are advocating a military intervention that could endanger millions of lives in allied South Korea across the border. But options for turning the screws on the North financially also are imperfect.
“I don’t like to talk about what I have planned, but I have some pretty severe things that we’re thinking about,” President Donald Trump said Thursday during an appearance at a news conference in Poland. “That doesn’t mean we’re going to do them.”
He said the US would be watching what happens in the coming weeks and months but chided North Korea for “behaving in a very, very dangerous manner” and added: “Something will have to be done about it.”
Already, a wide array of U.S. and international sanctions target North Korean entities and officials, making it illegal for Americans to do business with them. The US also has pursued companies outside North Korea accused of surreptitiously helping the communist country, such as a small Chinese bank the US penalised last week for allegedly laundering money for North Korea.
But the US thus far has avoided what sanctions experts describe as a logical escalation: secondary sanctions targeting banks and companies that do any business with North Korea — even legitimate transactions that aren’t explicitly prohibited by UN Security Council resolutions. Nikki Haley, Trump’s U.N. ambassador, told an emergency session of the council Wednesday that the world must do more to “cut off the major sources of hard currency to the North Korean regime.”
“We will look at any country that chooses to do business with this outlaw regime,” Haley said. On the Korean Peninsula on Thursday, South Korean jets and navy ships fired a barrage of guided-missiles into the ocean during drills, a display of military power two days after North Korea test-launched its first intercontinental ballistic missile.