Analysts: U.S. Unlikely To End Trade With China Over North Korea

Sep 6, 2017
Originally published on September 6, 2017 8:16 am
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President Trump is threatening to cut off trade with any country doing business with North Korea. This comes after that country tested a nuclear weapon Sunday. His remarks are seen as directed at China, which is North Korea's largest trading partner. But as NPR's Jackie Northam reports, few believe the U.S. would or could sever that critical trade relationship.

JACKIE NORTHAM, BYLINE: President Trump has fired off a stream of increasingly angry tweets over the past few months chastising China for not doing more to rein-in North Korea. Sunday's tweet was met with incredulity.

SCOTT KENNEDY: If the president meant by this tweet that the U.S. was going to try and sever all trade relations between the U.S. and China, that is essentially absurd.

NORTHAM: That's Scott Kennedy, a specialist on China's economy at the Center for Strategic and International Studies. He says via Skype that the U.S.-China trade relationship is worth $650 billion a year, and that's just direct bilateral trade.

KENNEDY: But in fact, the U.S. and China have trade relations which are so interwoven in the global supply chains that actually really fully cutting off change would basically require the U.S. to stop all international trade.

NORTHAM: Kennedy says that relationship translates into 2.6 million American jobs. He says Trump's comments show the president does not have a good grasp of how international trade works. Marcus Noland is the executive vice-president of the Peterson Institute for International Economics. He says making these sorts of statements without backing them up with action simply emboldens North Korea.

MARCUS NOLAND: There is a theory that the North Koreans have taken their measure of President Trump and realize that it's all just bluster, or mostly bluster, and they are pursuing their missile program ever more rapidly and now they've done their six nuclear test.

NORTHAM: China accounts for more than 90 percent of North Korea's trade. Anthony Ruggiero with the Foundation for Defense of Democracies says Beijing could bring North Korea to its knees, but it doesn't want to destabilize its neighbor. Ruggiero says instead of cutting off trade with China, the U.S. should focus on punishing those Chinese businesses that continue to skirt sanctions and deal with North Korea.

ANTHONY RUGGIERO: To date, they have gone after, you know, Chinese banks or companies or individuals six times. And it shows a dedicated effort to really get at the sanctions-evasion going on inside of China, but then also the financing that is touching the U.S. financial system.

NORTHAM: Treasury Secretary Steve Mnuchin suggested on Sunday the U.S. was looking into more such measures. Jackie Northam, NPR News, Washington. Transcript provided by NPR, Copyright NPR.