In response to yet another nuclear test from North Korea, considered its most powerful nuclear test yet, President Trump has warned that the U.S. is considering taking sanctions against the regime to an entirely new extreme.
President Trump issued this warning in the following tweet: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
If carried out, this total trade embargo will most significantly affect China, who is a major economic partner with both the United States and North Korea.
Trump considers China’s ending its trade with North Korea instrumental in bringing Pyongyang to heel.However, although China has agreed in measures to impose trade sanctions against North Korea, it continues to demonstrate an unwillingness to end trade with North Korea to the degree Washington would like to see.
As Sara Hsu says in Forbes
China could cut off trade with North Korea, but it has little to gain by doing so. Assuming that it cut off trade entirely, North Korea would find itself without much-needed resources, goods, and income, as North Korea-China trade amounts to about 40% of North Korea’s GDP in total volume. Many workers would encounter extreme hardship and attempt to illegally migrate to China. Social and economic instability would rise, forcing the government to impose even harsher punishments in order to control the population.What is more, China’s small and medium-sized businesses that export to North Korea would lose income, and many individuals employed in these firms would face unemployment. China would have to provide social assistance to individuals who lose their jobs, in addition to addressing the needs of illegal migrants from North Korea.
Still, one can hope Trump’s threat will be an effective one. American trade with China alone is massive, far greater than China’s trade with North Korea.According to the Office of the United States Trade Representative:
U.S. goods and services trade with China totaled an estimated $648.2 billion in 2016. Exports were $169.3 billion; imports were $478.9 billion. The U.S. goods and services trade deficit with China was $309.6 billion in 2016.
China is currently our largest goods trading partner with $578.6 billion in total (two way) goods trade during 2016. Goods exports totaled $115.8 billion; goods imports totaled $462.8 billion. The U.S. goods trade deficit with China was $347.0 billion in 2016.
With those kinds of numbers in play, China may decide Kim Jung Il is not worth the bother.
Other nations such as Qatar and the United Arab Emerites trade with North Korea as well, but similarly their trade with Pyongyang is a pittance compared to their trade with the United States.
Obviously ending trade with China (and to a lesser degree these Persian Gulf nations) would be horrific to the American economy as well.
However, given the U.S. options in dealing with North Korea - a list that includes war, complete withdrawal from the Korean peninsula (even if that results in South Korea being annexed by North Korea), or allowing Kim Jong Un the capacity to strike the U.S. with a nuclear weapon - it’s easily arguable the economic devastation that would be brought about by a trade embargo with China would not be the least desirable outcome.
[Note: This post was written by dk. Find him online at the African American Conservatives (AACONS) website or AACONS on Twitter and Facebook]
