- The Washington Times - Thursday, May 24, 2018

President Trump’s cancellation of the summit with Kim Jong-un amid hostile posturing from North Korea sets the stage for a new wave of brinkmanship and a dramatic expansion of the administration’s “maximum pressure” sanctions campaign against Pyongyang.

A key factor, according to sources close to the White House, will center on whether China — North Korea’s closest ally and only major trade partner — chooses to support Mr. Kim amid the breakdown in diplomacy or to help Washington enforce far sharper and more aggressive sanctions.

With Beijing so far offering no public reaction to Thursday’s development, concerns are swirling in Washington over the extent to which China may be seizing on the situation to squeeze concessions from Mr. Trump in bare-knuckle trade talks between U.S. and Chinese officials that are playing out in the background.

“The danger here for the Trump administration is China,” said Anthony Ruggiero, a former Treasury Department sanctions analyst who argues that the administration may need to expend sanctions not only against North Korean interests but against Chinese companies as well, in order to coerce Beijing away from its support for Pyongyang.

“The key … is China and making clear to the leaders in Beijing that if they side with North Korea, there is going to be some pain against their banks and their interests,” said Mr. Ruggiero, a fellow with the Foundation for Defense of Democracies.

He made the comments at a discussion hosted in Washington by the Center for the National Interest, moments after news broke that Mr. Trump had canceled the highly anticipated June 12 summit with Mr. Kim in Singapore.

The summit was first thrown into doubt last week amid a sudden wave of threatening rhetoric from North Korean officials. Mr. Trump said in a public letter to Mr. Kim on Thursday that Pyongyang’s “tremendous anger and open hostility” were unacceptable.

The development sent shock waves through Northeast Asia.

Key American ally Japan, which has cautioned against moving too quickly toward a detente with North Korea, remained silent Thursday night. Russian President Vladimir Putin expressed disappointment with Mr. Trump’s move.

With Russia second only to China as a quiet backer of North Korea, Mr. Putin offered broad support to Pyongyang, claiming Mr. Kim did everything he had promised in advance of the meeting and that it was the U.S. who had canceled.

Moscow’s reaction stood in contrast to that from South Korean President Moon Jae-in, who scrambled into the night to try to salvage the prospect of diplomacy.

“Denuclearization of the Korean Peninsula and the establishment of permanent peace are historic tasks that can neither be abandoned nor delayed,” Mr. Moon said at an emergency meeting with his top security officials in Seoul, according to South Korea’s Yonhap News Agency.

Secretary of State Mike Pompeo, testifying on Capitol Hill, told lawmakers that the cancellation of the Trump-Kim summit in some ways could be read as “situation normal” between the U.S. and North Korea.

“The global pressure campaign that is put in place is important and needs to continue,” he said. “Perhaps even this morning more than yesterday.”

But while Mr. Pompeo expressed confidence that China would work with the U.S. to maintain pressure on Pyongyang, questions loomed over Beijing’s ultimate reaction.

The Trump administration, like the Obama administration, has gone to great lengths to urge Beijing to play a more robust role in influencing North Korea toward halting its ballistic missile and nuclear weapons activities, both of which violate years of U.N. Security Council resolutions.

Frustration has long simmered in Washington that China — despite signing off on those Security Council resolutions — is quietly dragging its feet and playing a double game by tacitly backing North Korea as a tool to gain leverage against the U.S. in other arenas.

While Mr. Trump has publicly praised Beijing for helping on North Korea, the president authorized the Treasury Department in June to target a host of Chinese entities and individuals for supporting illegal financial activity with Pyongyang.

However, U.S. officials blocked only one Chinese bank from access to the global financial system, and national security sources told The Washington Times of a heated battle at the time inside the White House over whether and how to impose additional sanctions on Chinese institutions.

Key Republican lawmakers and several outside advisers spent the period pushing for Mr. Trump to move aggressively forward with such sanctions. But some of the president’s top aides, including then-National Economic Council Director Gary Cohn, were seen to be warning against such a move because of fear among Wall Street investment firms of a harsh backlash from Beijing.

With Mr. Cohn having left the administration, the president may now be poised to more aggressively target Chinese banks. But the question among analysts is whether the tense U.S.-China trade negotiations might limit how far Mr. Trump is willing to go.

The president himself has raised the specter of a connection between the U.S.-China trade negotiations and the North Korea situation. He has also publicly suggested that China may be using its influence over North Korea to gain leverage in the negotiations.

Speaking with reporters at the White House on May 17, Mr. Trump noted that North Korea took a sudden shift back toward hostile posturing against Washington only after Mr. Kim made an unexpected visit to Beijing.

“I think things changed a little bit when they met with China,” said Mr. Trump, who noted in the same breath that his administration was engaged in major trade talks with the Chinese and that the U.S. “has been ripped off for many, many years by its bad trade deals.”

Some analysts said China is less than eager to see the Trump administration succeed in its pursuit of a major diplomatic breakthrough with Pyongyang.

Retired Marine Lt. Gen. Wallace Gregson said China is aligned with North Korea’s strategic desire to disrupt the network of U.S. regional alliances with South Korea and Japan and that Beijing, for the time being, may be willing to turn a blind eye to Pyongyang’s possession of nuclear weapons.

China “does not want a democracy on its border, [and] it most definitely does not want U.S. forces on its border,” Mr. Gregson said at the discussion hosted by the Center for the National Interest, where he is the senior analyst on China and the Pacific.

“North Korea’s nuclear weapons are a means to that end,” he said, adding that “China would welcome any collateral damage out of all this to the U.S. alliance structure.”

Mr. Ruggiero, meanwhile, said Mr. Trump’s withdrawal from the Kim summit was “not really surprising” because North Korea appears to be unwilling to make a serious commitment to totally abandon its nuclear weapons — a key demand that the White House has said must be met upfront for any talks toward sanctions relief to proceed.

“The real question here is whether North Korea has made a strategic decision to denuclearize,” Mr. Ruggiero said. “I think that we now know that they have not.”

He added that the Trump administration’s “maximum-pressure sanctions framework” remains in place for “a rapid resumption and intensification.”

The first step, Mr. Ruggiero said, will be for the administration to “stop Chinese banks from facilitating North Korean sanctions evasion,” whether it be by Beijing, Russia, Iran or any other international broker seeking to work with Pyongyang.

• Guy Taylor can be reached at gtaylor@washingtontimes.com.

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