Trump Tightens NoKo Sanctions as the War of Words Escalates

In an attempt to curtail North Korea’s initiative to become a nuclear power, President Trump issued an executive order yesterday that would reprimand any person, company, or country that did business with North Korea. This move was directed at North Korea’s primary trading partners.

In a statement, the president said that China’s central bank has instructed its banks to cut ties with the rogue nation of North Korea. As a show of force and unity, the president sat next to the South Korean President and the Japanese Prime Minister when he said,  “I'm very proud to tell you that, as you may have just heard moments ago, China, their central bank has told their other banks — that's a massive banking system — to immediately stop doing business with North Korea." 

The sanctions allow our treasury secretary a more extensive set of financial tools to alienate any company or country from doing business with North Korea. Treasury Secretary Steven Mnuchin said, "Foreign financial institutions are now on notice that going forward they can choose to do business with the United States or North Korea, but not both." 

North Korea Ratchets up Threats to a New Level of Dramatic Concern

These actions by the United States have certainly put some dramatic pressure on the North Korean government, and in response they have threatened to test a hydrogen bomb over the Pacific Ocean.

Immediately following the United States announcement of new sanctions against North Korea, Kim Jong Un issued a televised statement calling our president “mentally deranged,” as he threatened Trump saying he would “pay dearly” for the threats.

According to CNN, “Kim's foreign minister Ri Yong Ho told reporters in New York that Pyongyang could launch a nuclear missile test in response. "This could probably mean the strongest hydrogen bomb test over the Pacific Ocean. Regarding which measures to take, I don't really know since it is what Kim Jong Un does," said Ri.”

Of course, such a blatant use of nuclear force could be considered an act of war by many countries, including the United States. If the leader of North Korea makes good on these most recent threats, it could take the current war of words out of the realm of threats, and into the realm of action by all parties.

The simple and most alarming truth about this threat is that, for the most part, Kim Jong Un has followed-through with past threats, and this action could escalate this conflict to the point of no return.

Wishing you as always, good trading,