New U.S. sanctions that give the Treasury Department the authority to block banks and businesses that do business with North Korea from using the U.S. financial system are a powerful tool. Existing United Nations sanctions haven’t yet forced a change in Kim’s behavior, while the known military options remain inconceivable in anything but the direst circumstances.
And the U.S. has every right to decide for itself who can and cannot participate in its financial system. China seems to recognize this, judging by recent instructions to Chinese banks not to hold accounts for North Koreans. In fact, Treasury would be wise not to deploy its new powers immediately, in order to test whether Chinese leaders are prepared to go even further.
They should. China isn’t wrong to insist that, in the long run, the only way to defuse this crisis is through dialogue. But the “freeze-for-freeze” proposal Beijing continues to push — whereby the U.S. and South Korea would suspend joint military exercises in exchange for the North temporarily halting its nuclear and missile testing — should be abandoned, not least because Kim himself shows no interest in it.
On the other hand, fears that additional sanctions will provoke a collapse in North Korea are overblown. Furthermore, that’s not their purpose: They’re meant to slow the North’s progress toward a nuclear-armed ICBM and squeeze the economy enough that the regime seeks to alleviate the pressure. There’s some evidence that current measures have already begun to drive up prices of goods in Pyongyang.
China should be focused on driving Kim back to the table, which means cracking down not just on North Korean businessmen but the Chinese intermediaries they use to evade sanctions. More creative measures may be in order, similar to the three-day “malfunction” in China’s oil pipeline to the North in 2003. If Chinese officials are indeed discussing post-Kim scenarios with their U.S. counterparts for the first time, they should make sure Kim himself knows about it.
For his part, President Donald Trump needs to restrain his rhetoric. It’s unlikely that Chinese leaders take it seriously anymore — and, in any case, the possibility of having more Chinese banks and companies cut off from the U.S. financial system would seem threat enough. For Kim, meanwhile, Trump’s insults only reinforce his argument that the North confronts a mortal threat from war-mongering Americans and that citizens should endure sacrifices for the good of the nation. And South Korean President Moon Jae-in has pleaded that this crisis be managed “in a stable manner.”
The U.S. has brought out a big stick. For now, Trump should let it speak for itself.