Unexpected North Korea Breakthrough Delays Trump Trade War With China (For Now)

A global punitive campaign on North Korea propelled by sharp new U.N. sanctions – amounting to a $1 billion ban on North Korea exports – received a welcome, and unexpected, boost on Sunday from China, the North’s economic lifeline, when Beijing slammed its neighbor for its ongoing missile and nuclear tests.

The Saturday sanctions agreed to unanimously in a 15-0 Security Council vote are aimed at cutting North Korean exports by about $1 billion a year, a move that would hit laborers and fishermen. Existing joint ventures would be prevented from expanding their operations. The new sanctions could cut off roughly one-third of North Korea’s estimated $3 billion in annual exports, ostensibly denying the nation of funds for its weapons programs. All countries are now banned from importing North Korean coal, iron, lead and seafood products, and from letting in more North Korean laborers whose remittances help fund Kim Jong Un’s regime.


U.N. Security Council members vote on toughening sanctions on
North Korea in New York, on Aug. 5.

However, what was most remarkable about the vote is that both China and Russia backed it, siding – for the first time in a long while – with the US on matters of foreign policy.

And, as Bloomberg summarizes, just days after geopolitical events looked bleak at the start of last week when leaders of the world’s biggest economies appeared set on collision course after North Korea’s second ICBM text in a matter of weeks prompted Trump to lash out at China on Twitter, followed by reports that his administration was getting ready to take steps that could lead to a trade war, all that changed with the “breakthrough” vote at the United Nations on Saturday.

“It’s enough to give the administration some new hope that it can work with China on North Korea and trade,” said former senior director for Asia at the National Security Council, Dennis Wilder. Additioanlly, the move would “almost certainly” defuse rising tensions of an imminent trade war, and stop the U.S. from imposing secondary sanctions on China, and may delay a planned investigation into intellectual property theft.

President Trump was delighted, tweeting on Saturday afternoon that “The United Nations Security Council just voted 15-0 to sanction North Korea. China and Russia voted with us. Very big financial impact!”

Even, one of Trump’s most vocal critics, former US ambassador to Russia, Michael McFaul congratulated Trump on his “genuine foreign policy achievement”:

Congratulations @realDonaldTrump . This vote is a genuine foreign policy achievement. https://t.co/eNQ0GU5uV7

— Michael McFaul (@McFaul) August 5, 2017

That said, some remained skeptical: as AP adds, the Trump administration cautiously embraced China’s apparent newfound cooperation, while putting it on notice that the U.S. would be watching closely to ensure it didn’t ease up on North Korea if and when the world’s attention is diverted elsewhere. But there were no signs the U.S. would acquiesce to China’s call for a quick return to negotiations. Though Beijing repeated its call for the United States and North Korea to resume talks, the U.S. said that was still premature, and rejected yet again a Chinese call for the U.S. to freeze joint military exercises with South Korea in exchange for the North halting nuclear development. Pyongyang views the military exercises as rehearsals for an invasion.

The U.S. also warned it planned to rigorously monitor China’s compliance with the new penalties. Susan Thornton, the top U.S. diplomat for Asia, said Beijing had historically cooperated with sanctions after flagrant North Korean violations but then slipped back over time.

 

“We want to make sure China is continuing to implement fully the sanctions regime,” Thornton told reporters in Manila. “Not this kind of episodic back and forth that we’ve seen.”

Far from going above and beyond, China – North Korea’s main ally and trading partner – has been regularly accused of failing to fully implement previous UN resolutions. After North Korea’s second ICBM test on July 27, the U.S. called China and Russia “economic enablers” of Kim’s regime. China has sought to cool tensions on the Korean Peninsula, particularly as Trump administration officials warn that war is possible to stop Kim from acquiring the ability to hit the U.S. mainland with a nuclear weapon. China sees the collapse of Kim’s regime as a greater strategic threat that could lead to a refugee crisis and U.S. troops on its border.

Caveats aside, for the U.S., it was a long-awaited sign of progress for Trump’s strategy of trying to enlist Beijing’s help to squeeze North Korea diplomatically and economically.

Meanwhile, Chinese Foreign Minister Wang Yi, urged the North to “maintain calm” despite the U.N. vote.

At a meeting on Sunday in Manila, where top diplomats from more than 20 countries are gathering, China’s Wang made clear that the goal of the sanctions was to push North Korea toward dialogue. He met separately with both North Korean Foreign Minister Ri Yong-ho and U.S. Secretary of State Rex Tillerson, urging both to reduce tensions.

Address North Korea, in an unusually direct admonition Wang said “Do not violate the U.N.’s decision or provoke international society’s goodwill by conducting missile launching or nuclear tests,” Wang also urged North Korea on Sunday to make a “smart decision”:

It will help the DPRK to make the right and smart decision,” Wang told reporters, after discussing the sanctions with North Korean Foreign Minister Ri Hong-Yo ahead of a regional security forum in the Philippine capital Manila.

However, Wang also emphasised that negotiations were the only way to solve the issue, after the United States had left open the possibility of military action against Kim Jong-Un’s regime. Wang called for a resumption of the stalled six-nation talks – hosted by China and including the United States, Japan, Russia as well as the two Koreas – aimed at curtailing the North’s atomic ambitions.

“It’s not that easy but it is a direction we need to work together towards,” Wang said of the six-nation talks. “Only dialogue and negotiation is the correct way out to address the Korean peninsula issue.”

Wang said he also spoke with Tillerson about the need to work together to make Trump’s upcoming visit to China maintain “the momentum of healthy development” and help shape Sino-U.S. relations over the next 50 years. China has repeatedly proposed that North Korea halt further nuclear and missile tests in return for the U.S. and its allies suspending military exercises in the region – a so-called freeze-for-freeze. The U.S. rejects this, saying that Kim must be prepared to give up his nuclear weapons entirely – a prospect that many analysts view as unlikely since Kim sees them as essential to his survival.

* * *

Still, while the Chinese Foreign Minister Wang expressed confidence on Sunday that the sanctions would bring Kim Jong Un back to the negotiating table, many North Korea watchers are skeptical that he’ll give up his quest for an ICBM that can hit the U.S. with a nuclear weapon. China will still be providing Kim’s regime with food and fuel, and North Korea’s nuclear weapons program is already in an advanced stage.

The new sanctions alone are probably insufficient to alter North Korean behavior,” said Wilder, who was also a former Chinese military analyst at the CIA. “But if Beijing quietly imposes more unilateral sanctions, such as on fuel shipments to North Korea, the North Koreans would be forced to reconsider further ICBM testing.”

“The situation is now in a deadlock because of the U.S. mindset,” said Shi Yuanhua, a professor who researches Korea at Fudan University in Shanghai. The sanctions are more “a gesture of condemnation rather than an effective tool to solve the real problem.”

As for Xi and Trump, this is just “the latest twist in a relationship that lurches from good to bad seemingly in the time it takes to write a 140-character tweet”, as Bloomberg colorfully puts it. In other words, concerns about an imminent trade war appear put on the back burner thanks to China’s UNSC vote on Saturday…. for now.

“The Trump administration has made it explicit that there is a constant trade-off between trade issues and North Korea,” said John Delury, an associate professor of Chinese studies at Yonsei University in Seoul. “It would appear President Trump is happy with Xi Jinping now, but it wouldn’t be surprising in a matter of weeks for a tweet to say now he’s disappointed again.”

Meanwhile, the best single indicator whether North Korean has taken the Chinese – and UN – hint, will be whether it refrains from any more ICBM launches. Naturally, the next time Pyongyang launches something, Trump will be there, ready and tweeting, as the specter of trade war between China and the US comes back with a bang.


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Author: Tyler Durden

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