August 7, 2017

The Real Trading Behind North Korean Sanctions

The UN’s latest move against North Korea is significant — if the Chinese uphold their end of the bargain.

In a significant move Saturday, the United Nations Security Council unanimously leveled new sanctions on North Korea after the hermit kingdom’s game-changing tests of intercontinental ballistic missiles last month. These ICBMs can reach the continental U.S., meaning many American cities are in range of a nuclear attack by unhinged North Korean dictator Kim Jong Un. The sanctions on North Korean exports of coal, iron, lead and seafood are worth about $1 billion, which is roughly a third of its annual export revenue.

“This resolution is the single largest economic sanctions package ever leveled against the North Korean regime," said UN Ambassador Nikki Haley. "This is the most stringent set of sanctions on any country in a generation. And this time, the council has matched its words and actions.” Yet Haley appropriately warned, “We should not fool ourselves into thinking we have solved the problem. Not even close. The North Korean threat has not left us.”

The sanctions are important because Russia and especially China agreed to them. China is not only North Korea’s primary communist backer but its biggest trading partner, accounting for at least 85% of the North’s trade.

To succeed in countering the North Korean threat, the U.S. must have assistance from China. But China has its own interests, particularly in the amount of trade it depends on with the U.S. Thus, the Chinese are using North Korean saber rattling as a bargaining chip to counter Donald Trump’s rhetoric about trade with China. It’s leverage to talk Trump down from starting a trade war, which was itself partly a bargaining position to get the Chinese to rein in North Korea. So perhaps the Art of the Deal is working for both sides — if the Chinese uphold their end of the bargain rather than skirting sanctions as they have in the past. Oh, and if anything will work on a lunatic like Kim, who promised “thousands-fold” vengeance and a “severe lesson” for the U.S., as well as reiterating that “under no circumstances” will the North negotiate on its nuclear weapons.

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