Hours after North Korean state television said the country successfully tested a hydrogen bomb that can be mounted onto an intercontinental ballistic missile, United States president Donald Trump tweeted on Sunday threatening to slap a trade embargo on countries that currently do business with North Korea.
Trump also suggested squeezing China, North Korea's patron for many decades and a vital American trading partner, on the economic front, in hopes of persuading Beijing to exert leverage on its neighbour.
The United States is considering, in addition to other options, stopping all trade with any country doing business with North Korea.
— Donald J. Trump (@realDonaldTrump) September 3, 2017
The action suggested in Trump's trade tweet would be radical. The United States imports about $40 billion in goods a month from China, North Korea's main commercial partner. Lassina Zerbo, head of the United Nations test ban treaty organisation (CTBT), said sanctions already imposed against North Korea aren't working. On global trade flow, North Korea does not have a very significant impact. According to MIT's Observatory of Economic Complexity, the country is the 119th largest export economy in the world. The communist nation exports just shy of $3 billion worth of goods every year, which include items like coal, fabric, oil and retail products. The country relies heavily on imports totalling nearly $3.5 billion, the data shows. The top export destinations of North Korea are China, India, Pakistan, Burkina Faso and a few other nations in Asia, with China leading by a big margin. The biggest import origins for the country are China, India, Russia, Thailand and the Philippines, according to the data. Most of these major economies like India, Russia, and Pakistan also have strong bilateral relations with the United States. In 2016, China — Pyongyang's largest trading partner — was the biggest exporter to the United States, and the third largest importer from the nation after Canada and Mexico, according to the International Trade Administration. The trade in goods between China and United States last year totalled $578.6 billion. The trade in services between the countries was worth $69.6 billion, adding up to well over half a trillion dollars in trade every year, ABC News reported. Hence when Donald Trump tweeted with the threat of slapping embargoes on nations with economic ties with Pyongyang, there is little doubt America itself can sustain the economic hit. Others speculate that such a move can also lead to global recession.
..North Korea is a rogue nation which has become a great threat and embarrassment to China, which is trying to help but with little success. — Donald J. Trump (@realDonaldTrump) September 3, 2017
As CNBC points out, America's relationship with China is already strained, while diplomatic ties to Russia are all but frayed in the aftermath of the contentious 2016 election. With those factors as a backdrop, economists say the US cannot afford to engage in a trade war with not just one but two major economies.
Multiple economists and commentators are not seeing Trump's trade threat as credible, as it could not only trigger an economic backlash but also a military one, The Guardian reported.
Others like Matthew Goodman, a trade expert at the Washington's Centre for International and Strategic Studies, said Trump's suggestion was not viable because it would mean the United States would cut off trade with not just China, but France, India and Mexico too. "The notion of stopping 'all trade' with anyone who does business with North Korea is absurd," ABC News quoted him as saying.
Besides, a complete trade ban would also destabilise political relations of the United States with different countries and result in its isolation, experts predict.
Sunday's detonation by North Korea was considered a nuclear test by several countries including the United States. The precise strength of the explosion, described by state-controlled media in North Korea as a hydrogen bomb, has yet to be determined.
However, no abnormal radiation readings have been detected from North Korea’s nuclear test on Sunday, Japan's Nuclear Regulation Authority said.
South Korea's weather agency said the artificial earthquake caused by the explosion was five times to six times stronger than tremors generated by the North Korea's previous five such tests.
The impact reportedly shook buildings in China and in Russia. Secretary of State Rex Tillerson was calling counterparts in Asia, and Trump's treasury secretary, Steven Mnuchin, said he was putting together proposed new sanctions for Trump to consider.
Trump warned last month that the United States military was "locked and loaded, should North Korea act unwisely" and that the US would unleash "fire and fury" on the North if it continued to threaten America.
The bellicose words followed threats from North Korea to launch ballistic missiles toward the US Pacific territory of Guam, intending to create "enveloping fire" near the military hub that's home to American bombers.
The North's latest test was carried out at 12.29 pm local time at the Punggye-ri site where it has conducted past nuclear tests. Officials in Seoul put the magnitude at 5.7 on Richter scale; the United States Geological Survey said it was a magnitude 6.3. The strongest artificial quake from previous tests was a magnitude 5.3.
With inputs from AP
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Updated Date: Sep 05, 2017 06:12:03 IST