September 20, 2017
U.S. President Donald Trump’s speech at the United Nations General Assembly in New York on 19 September will be in the headlines throughout the week. In forceful comments defending his “America First” mantra, Trump said that, “if it is forced to defend itself or its allies” the U.S. will have “no choice to but to totally destroy North Korea.” And he belittled North Korea’s leader Kim Jong-un by saying that “Rocket man is on a suicide mission for himself and for his regime.”
Despite the rhetorical fireworks, the speech carried important nuance which provided some clarity on the Trump administration’s North Korea policy. Scratching beneath the surface suggests that market and business risk related to tensions on the Korean peninsula is lower than the headlines imply. First of all, Trump tied any potential U.S. strikes against the North to a scenario where the U.S. “is forced to defend itself or its allies” – which strongly suggests that the administration does not view preemptive action as a reasonable option. Trump also said that the UN must do “much more” to curtail North Korea and called it an “outrage” that “some nations” would trade with, arm, supply, and financially support Pyongyang. These comments contain a call for increased multilateral sanctions against Pyongyang and a threat to China that the U.S. will impose further penalties against Chinese entities doing business with the North if the current situation continues.
Conversations in DC last week also lead us to believe that the chance for a military strike by the U.S. against North Korea is very low given Pyongyang’s strong deterrent capabilities (namely, mobile artillery that ensures they have the ability to inflict significant damage on South Korea if the U.S. does take action). And that Trump’s closest advisors on North Korea policy are advocating for economic sanctions and potentially diplomacy above military action. Moreover, military steps that are on the table are likely more constrained than direct strikes, and would include actions such as stepped up military exercises and, at most extreme, a naval blockade.
In short, the U.S. will look to step up sanctions and likely will take further steps targeted at Chinese entities, risking some U.S.-China tension. But the most likely scenarios for the next few months are about tension and stalemate, not all-out conflict.
There is one immediate global concern here worth watching, however. If North Korea successfully obtains the ability to arm an intercontinental ballistic missile with a nuclear warhead, it will be a major setback for the global nuclear non-proliferation regime. A nuclear armed Pyongyang will create a big incentive for South Korea and Japan to obtain nuclear weapons. Already Secretary of Defense James Mattis confirmed this week that his counterpart in Seoul, Defense Minister Song Young-moo, asked about potentially having the U.S. deploy tactical nuclear weapons to South Korea. With eroding confidence about U.S. staying power in Asia, expect weapons build-up in the region to be a bigger concern in the face of the growing threat from Pyongyang.