No backing down – United States President Donald Trump and Chinese President Xi Jinping. Photo: Reuters/Carlos Barria
US President Donald Trump and Chinese President Xi Jinping. Photo: Facebook

The world needs to do more to “cut off the major sources of hard currency to the North Korean regime,” US ambassador to the UN Nikki Haley said in a speech during a Security Council session Wednesday.

“We will not look exclusively at North Korea,” Haley added. “We will look at any country that chooses to do business with this outlaw regime.”

Senior US officials have stated that new “secondary” sanctions on companies and financial institutions conducting business with North Korea, even if in compliance with UN resolutions, are being reviewed as a possible next step.

The comments come as Trump has stepped up rhetoric aimed at pressuring China to squeeze North Korea’s access to cash, criticizing Beijing for not doing enough. The US has leverage, but China will push back on any unilateral efforts.

“The US needs to understand the Chinese will never allow Chinese companies and individuals to be designated (for sanctions) at the UN, and the US dollar is still pre-eminent. So the US has leverage,” Anthony Ruggiero at the Foundation for Defense of Democracies, was quoted by Time magazine as saying. The organization advocates a hard line on North Korea.

But China would be sure to push back and also has leverage. The extent of US-China economic integration has in the past prevented US administrations from levying such sanctions, and it is hard to predict what Beijing would do in retaliation.

Nevertheless, it would not be a surprise to see Trump follow through on his threats, and US companies with the most success doing business in China should be worried.