Trump’s financial strategy persuades China to put screws to North Korea

President Trump persuaded China to freeze all financial transactions with North Korea and ordered a new round of U.S. sanctions Thursday, closing out his first U.N. General Assembly with a major diplomatic victory in his efforts to curb Pyongyang’s nuclear weapons and missile programs short of war. In a carefully choreographed strategy deployed from the shadow of the United Nations headquarters in New York, Treasury Secretary Steven T. Mnuchin called the head of China’s central bank very early Thursday to alert him that Mr. Trump was preparing an executive order to sanction any financial institutions doing business with North Korea. He asked for the cooperation of China, the main source of North Korea’s cash. Hours later, the People’s Bank of China announced it was directing all other banks in China to halt financial transactions with North Korea. Soon afterward, Mr. Trump signed an executive order in a meeting with the presidents of South Korea and Japan, expanding the Treasury Department’s ability to freeze the assets of banks or individuals doing business with Pyongyang. Mr. Trump praised China’s action, saying with uncharacteristic understatement that it was “somewhat unexpected.” “For much too long, North Korea has been allowed to abuse the international financial system to facilitate funding for its nuclear weapons and missile programs,” Mr. Trump said. “Tolerance for this disgraceful practice must end now.” Mr. Trump’s tightening of the screws culminated his weeklong effort to marshal more international pressure on North Korea. The expanded and coordinated sanctions were announced two days after Mr. Trump alarmed many at the General Assembly by warning that the U.S. was prepared to “totally destroy” North Korea if it attacked the U.S. or its allies. South Korean President Moon Jae-in praised Mr. Trump’s handling of the crisis, saying through a translator, “North Korea has continued to make provocations, and this is extremely deplorable and this has angered both me and our people, but the U.S. has responded firmly and in a very good way.” White House National Security Adviser H.R. McMaster said Mr. Trump is taking the steps to try to resolve the crisis “short of war.” A senior administration official said the White House wants China and North Korea to understand that “this is different than anything in the last quarter century.” “We’re not negotiating for the right to negotiate, which is all the ‘strategic patience’ was all about,” the official said. “We’re going to try and have discussions so that we’ll reach a point where we agree to have negotiations. And we’ve made it clear that they need to step forward and be prepared to abandon the ballistic missile program and dismantle the nuclear weapons program. That’s where negotiations and discussions begin.” The official added, “We think China’s going to need to walk with them on that because of the outsized role that China plays in their economy, their long historic relationship, dating all the way back to the Korean War.” North Korean leader Kim Jong-un described Mr. Trump early Friday in Asia as “mentally deranged,” according to Reuters. He said North Korea would consider the “highest level of hard-line countermeasure in history” against the U.S. in response to Mr. Trump’s threat to “totally destroy” the North. Some analysts said Mr. Trump’s thinly veiled threat of sanctions against Chinese banks, his lobbying of Chinese President Xi Jinping and even perhaps his threat of nuclear war appear to be working, at least for now. “U.S. pressure is having an effect,” said Bill Bishop, a China analyst and publisher of the Sinocism newsletter. “If the U.S. decides to ratchet up secondary sanctions another notch, expect sanctions and/or penalties against a large [People’s Republic of China] bank like China Merchants, but not one of the big four.” Michael C. Desch, director of the International Security Center at Notre Dame University, said China was likely responding to the threat of war as much as any other incentive. “My sense is that it is not sanctions and the U.N. but rather China’s fear that the North Korea situation is spiraling out of control that is leading Beijing to take these steps,” he said. “The last thing China wants is a war on its border that, at a minimum, could remove a key buffer between it and an American ally and at a maximum could result in a thermonuclear war right next door.” Sen. Ben Sasse, Nebraska Republican and a member of the Senate Committee on Banking, Housing and Urban Affairs, said the administration’s sanctions “are aimed squarely at North Korea’s despot but also remind China that it has a strong interest in preventing a nuclear arms race in Asia.”

Those are but a few of the things that China is worried about.  They don’t want to see a reunified Korea….under southern rule.  They don’t want an American ally that border’s China.  They also don’t don’t want to deal with the thousands and thousands of North Korean refugees flooding their border if a military (even conventional) war breaks out.  China like order; not chaos.  That would be more chaos than they’d care to deal with.  Those are just a few of the incentives they have to work with Trump.  And it wasn’t that hard, really.  It just took a little leadership from someone who isn’t afraid to upset the apple cart.  Trump isn’t a natural politician.  He is just someone who wants to see result; to see progress.  And, he doesn’t take no for an answer.  Nor does he care whose tender feelings he hurts.  In other words, he’s a business-man, and a leader.  Imagine that!

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