President Trump said on Sunday that the United States could consider stopping all trade with countries doing business in North Korea, in a move that could spell economic catastrophe for the pugnacious country.
One problem: It would mean economic disaster for the United States as well.
Despite years of economic sanctions and international condemnation, North Korea still conducts modest trade with a host of United States allies, including Brazil, Germany and Mexico.
But the North’s biggest partner by far is China, which accounts for about four-fifths of its trade and helps the country with its fuel, food and machinery needs. China is also the largest trading partner of the United States, in a relationship worth nearly $650 billion a year in goods and services covering a range of items, like auto parts, apple juice and Apple's widely anticipated new iPhone.
That makes cutting off all United States trade with China a nonstarter, experts say. But Mr. Trump’s extreme remark epitomizes the tough choices that American policy makers face. While the United States and other countries have tightened sanctions and moved to cut off North Korea from the rest of the economic and financial world, Pyongyang continues its efforts to develop nuclear weapons and the missiles to deliver them.
The United States has limited options. It could more broadly target Chinese companies that do business in North Korea. But that could prove ineffective against a Chinese government that worries that trade limits could worsen conditions in the North, making the situation there even more unpredictable.
Reference: CNBC
Read More: https://www.cnbc.com/
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