• Trump has few options on North Korea as potential economic hazards come into focus

    1 Aug 2017 | Economic News

Each new North Korean missile test brings American officials closer to an excruciating choice: striking militarily to stop Pyongyang's nuclear program from endangering the U.S., or accepting the North Korean threat while scrambling for a new strategy.

The Trump administration has signaled that military options, which would put the South Korean population as well as American troops stationed there in the line of fire, remain on the table. But Marine Gen. Joseph Dunford, chairman of the Joint Chiefs of Staff, has acknowledged the cost could be "a loss of life unlike any we have experienced in our lifetimes."

The duration, scope and intensity of such a conflict would be highly unpredictable. In addition to the toll in casualties, it could destabilize the entire Asia-Pacific region and, at minimum, severely strain the confidence of consumers and investors in the United States.

A second alternative is relying on pressure from North Korea's neighbor China. President Donald Trump has oscillated between promising that China could swiftly halt the North Korean nuclear program, to thanking China for trying unsuccessfully, to faulting China for "just talk." He tweeted that "we will no longer allow" China to keep profiting from trade with the U.S. without exerting great effort.

But China, which worries that substantially more pressure on North Korea could destabilize the regime and trigger a flood of refugees across their border, has made plain the limits of its cooperation. Should the Trump administration hit Chinese goods with import tariffs as a result, Beijing has retaliatory economic steps ready to go.

A third option is to adapt the approaches that previous administrations have used in vain: Sustaining sanctions and ramping up military deterrence while offering incentives for North Korea to enter negotiations with nations including Russia, China and Japan. Former Obama national security aide Antony Blinken gives that approach no more than a 30 percent chance of success, but said it would avoid the "huge, huge risk" of military action.

Reference: CNBC

Read More: https://www.cnbc.com/2017/07/31/potential-economic-hazards-from-north-korea-crisis-come-into-focus.html

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