Trump’s new sanctions target North Korea
Penalties will force nations to choose with whom they will conduct business
NEWYORK » President Donald Trump announced new U.S. financial sanctions Thursday that target North Korea and foreign companies or individuals that do businesswith the rogue nation, whose escalating nuclear and ballistic missile capabilities have reached what U. S. officials consider a crisis point.
The new penalties seek to leverage the dominance of the U.S. financial system by forcing nations to choose whether to do business with the United States or the comparatively tiny economy of North Korea. U.S. officials acknowledged that like other sanctions, these may not deter North Korean leader Kim Jong Un’s drive to threaten the United States with a nuclear weapon, but is aimed at slowing him down.
Trump’s executive order grants the Treasury Department additional authority that Trump said would help cut off international trade and financing thatKim’s dictatorshipuses to support its banned weapons programs.
“North Korea’s nuclear program is a grave threat to peace and security in our world, and it is unacceptable that others financially support this criminal, rogue regime,” Trump said in brief public remarks during ameeting with the leaders of South Korea and Japan to discuss strategy to confront Pyongyang.
He added that the United States continues to seek a “complete denuclearization of North Korea.”
Significantly, Trump also said that Chinese President Xi Jinping had ordered Chinese banks to cease conducting business with North Korean entities. Trump praised Xi, calling the move “very bold” and “somewhat unexpected.”
China is North Korea’s chief ally and economic lifeline. Some 90 percent of North Korean economic activity involves China, and Chinese entities are the main avenue for North Korea’s very limited financial transactions in the global economy. China is also suspected of turning a blind eye to some of the smuggling and sanctions-busting operations that have allowed Pyongyang to rapidly develop sophisticated longrange missiles despite international prohibitions on parts and technology.
All U.N. sanctions have to be acceptable to China, which holds veto power. China’s recent willingness to punish its fellow communist state signals strong disapproval of North Korea’s international provocations, but China and fellow U.N. Security Council member Russia have also opposed some of the toughest economic measures that could be applied, such as banking restrictions that would affect Chinese and other financial institutions.
“We continue to call on all responsible nations to enforce and implement sanctions,” Trump said.
He added that the order will give Treasury Secretary Steven Mnuchin the “discretion to target any foreign bank knowingly facilitating specific transactions tied to trade with North Korea.”
U.N. Ambassador Nikki Haley said the goal is to “cut the revenue so they could do less of their reckless behavior.”
Trump’s announcement came as he has sought to rally international support for confronting Pyongyang during four days of meetings here at the U.N. General Assembly. In a speech to the world body on Tuesday, Trump threatened to “totally destroy” the North if necessary and referred derisively to Kimas “Rocket Man.” But the president and his aides have emphasized that they are continuing to do what they can to put economic and diplomatic pressure on North Korea to avoid a military conflict.
U.S. officials say there is still time and room for diplomacy, if North Korea shows that talking could be productive. Other countries, including China and Russia, are pressing Washington to make a greater effort toward talks and an eventual bargain that could buy Kim out of his weapons without toppling his regime.
The shape of a possible deal has been evident for years, but Kim has raised the stakes, and perhaps the price, with his rapid development toward the capability to launch a nuclear- equipped intercontinental ballistic missile at U.S. territory.
Asked why North Korea might entertain such an international deal when Trump appears poised to undermine a similar one with Iran, Secretary of State Rex Tillerson said a North Korea deal would be designed very differently.
“While the threat is the same — it’s nuclear weapons — the issues surrounding North Korea are very different than the issues surrounding Iran,” Tillerson said Wednesday. “Iran is a large nation, 60 million people; North Korea is a smaller nation, the hermit kingdom, living in isolation. Very different set of circumstances that would be the context and also the contours of an agreement with North Korea, many aspects of which don’t apply between the two.”
In recent weeks, the Security Council has approved two rounds of economic sanctions but also left room for further penalties. For example, the sanctions put limits on the nation’s oil imports but did not impose a full embargo, as the United States has suggested it supports. The Trump administration has signaled it also wants a full ban on the practice of sending North Korean workers abroad for payments that largely go to the government in Pyongyang.
Mnuchin emphasized that “this action is in no way specifically directed at China,” and he said he called Chinese officials to inform them ahead of the announcement.
“Foreign financial institutions are now on notice that, going forward, they can choose to do business with the United States or with North Korea, but not both,” Mnuchin said.
In recent years, the United States has sought to expand the economic pressure by working through the international banking system, where the country has particular leverage because so much of international trade is conducted in dollars. The “vast majority of international transactions are denominated in dollars, the world’s reserve currency,” a congressional report found last year.
Even when the companies are outside the United States, trade conducted in dollars typically must run through U. S. banks, and last year, that provided the Obama administration an opportunity to interrupt such business.