Sanction China over North Korea? The case for and against.

'Secondary sanctions' on countries doing business with Iran helped bring that country to the table, say some analysts. But China's own concerns over North Korea likely outweigh any fears of lost trade with the US, say others.

Evan Vucci/AP
President Trump meets with Chinese President Xi Jinping at the G20 Summit, Saturday, July 8, 2017, in Hamburg, Germany.

Nikki Haley, President Trump’s ambassador to the United Nations, says the United States has “multiple forms” of “ammunition” yet to use to stop North Korea’s growing nuclear and ballistic missile threats.

And among the weapons the US holds in its quiver, the Trump administration’s tough cop on foreign policy says, is trade retaliation against China.

If Beijing fails to do more – or undermines international efforts to do more – to pressure Pyongyang over its advancing nuclear and intercontinental ballistic missile programs, the US will slap the Chinese with punitive economic measures to encourage them to reconsider.

That, at least, is the position Ms. Haley has advanced over the past week since North Korea jarred the world with what some have called a “game changer” when it successfully launched an ICBM on July 4.

First at an emergency UN Security Council meeting Wednesday, then on Sunday TV news programs, Haley presented China with an ultimatum: Either you do more to stop North Korea, or we will come after you.

But would such an aggressive stance toward China work?

Some former officials with sanctions experience under the Obama administration think it could. They point to the way so-called “secondary sanctions” prompted action by affected countries – including China – that helped bring Iran to the negotiating table over its nuclear program.

The problem many analysts with long experience in Northeast Asia see is that China has much higher stakes in North Korea than in Iran. So similar measures targeting China are unlikely to achieve the intended goal, they say, while alienating the one power that does hold sway with the North’s Kim regime.

Fear of a failed state

“The assumption here is that if we thump the Chinese with a trade war or some other tough measures they’ll get the message and really turn the screws on North Korea, but I don’t think it’s going to work,” says James Walsh, a North Korea expert and senior research associate at the Massachusetts Institute of Technology’s Security Studies Program in Cambridge, Mass.

“When you slap people,” he adds, “they mostly just get ticked at you.”

The bottom line, Dr. Walsh says, is that the US is never likely to do enough to punish the Chinese (the world’s second-largest economy and America’s largest trading partner) to force them to reassess what they care about most – avoiding a collapsed North Korea on their northeastern border.

“I don’t know that there’s anything we could sanction or any measures we could take that would mean more to [the Chinese] than the prospects of a failed neighboring state,” he says.

What the Trump administration has to remember, others point out, is that the US is not alone in considering North Korea a serious security issue.

“I don’t believe the Chinese government would allow itself to be humiliated by the US into accepting things it considers are inimical to its national security interests,” says Doug Bandow, a North Asia analyst with the Cato Institute in Washington. “We need to look at this from the Chinese side and understand what a failed state on their border means to them.”

On Sunday news programs, Haley alternated between portraying eventual economic measures targeting China as retaliation for a failure to act, or as a form of prodding to encourage action.

“This is encouraging and motivating China to say this is a whole new level, this is an ICBM test,” she said on “CBS Sunday.” Economic measures would let the Chinese know, “We need you to do more.”

But on CNN, she portrayed the contemplated economic measures as retaliation in the case that China uses its Security Council veto to kill a North Korea sanctions resolution the US says it will present in the council “in the coming days.” Both China and Russia have indicated they favor dialogue with the North and would veto any new sanctions effort.

The Trump wild card

“Ammunition comes in many forms,” Haley said on “State of the Union,” insisting that the US has “a lot of options on the table” when it comes to pressuring China.

“China has a choice to make. They’re either going to go along with us and the rest of the international community and say, yes, we think that what North Korea did was wrong, or they’re not,” she said. “If they don’t go along with that [resolution],” she added, “the president has made it clear that he will start looking at trade relations with China.”

Nevertheless, Haley’s repeated references to trade measures against China over North Korea do not mean Mr. Trump actually intends to pursue such actions. The president has vacillated over the past week between praising and criticizing Chinese President Xi Jinping’s willingness to get tough with Pyongyang.

And other senior Trump administration officials have discovered in recent days that there are risks to publicly promoting the president’s ideas – one of which being he might change his mind.

For example, Treasury Secretary Steven Mnuchin was also on Sunday TV news programs, where among other things he spoke glowingly of the idea of a cybersecurity pact with Russia, something Trump had said in a tweet that he discussed Friday with Russian President Vladimir Putin. Mr. Mnuchin hailed the proposed pact as “a very significant accomplishment for President Trump.”

But by Sunday evening – after several Republican senators derided the idea as akin to putting the fox in charge of the henhouse – Trump tweeted that he did not think such a pact with Russia was possible.

The idea of slapping sanctions or taking other trade action against China over its support of North Korea is different, however, in that its trial balloon has remained aloft.

What worked with Iran

One reason for that may be that evidence is fresh of such action working. The Obama administration took aggressive action against banks and other entities doing business with Iran as a means of hampering Tehran’s ties to the international economy and access to financial markets – thereby sending the message that if it advanced its nuclear program it risked economic isolation.

Iran chose international economic access and negotiated a deal halting its march toward a nuclear weapon.

“In dealing with North Korea, the Trump administration should ... take a page out of the Obama administration’s Iran sanctions playbook and apply against North Korea the tool used successfully to bring Iran to the nuclear negotiating table – “secondary sanctions” on those who do business with the regime,” David Cohen, Treasury undersecretary for terrorism and financial intelligence under Obama, wrote in the Washington Post in April.

Resorting to secondary sanctions against Chinese banks doing business with North Korea could work for several key reasons, according to Mr. Cohen: first, because the Trump administration has said its end goal is a diplomatic solution to North Korea’s threats, the approach Beijing prefers.

But second, Trump continues to suggest that if diplomacy does not work, he will take whatever action is necessary, including military strikes, to prohibit Pyongyang from perfecting a missile capable of carrying a nuclear weapon to the US. And if there’s something the Chinese want to prevent about as much as a collapsed North Korea, Cohen suggests, it’s US military action on the Korean Peninsula.

MIT’s Walsh agrees that secondary sanctions played an important role in the case of Iran. But the North Korea case is different in ways that make the success of such sanctions much less likely, he says.

“The map is different, and then Iran’s economy is very different from North Korea’s,” he says.

The US should also remember what the ultimate objective of sanctions would be, Cato’s Mr. Bandow says, and whether the odds of success are high enough to risk making the Chinese less cooperative.

“The real question is, what’s the target?” says Bandow who recently spent four days meeting with officials in North Korea. “I’m skeptical that secondary sanctions can ever do enough to dry up the funding they need [in the North] to maintain control and to keep their weapons and missile programs going.”

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