Treasury Secretary Steven Mnuchin is serious about making sure the UN imposed sanctions on North Korea are adhered to:
Treasury Secretary Steven Mnuchin warned the U.S. may impose additional sanctions on China — potentially cutting off access to the U.S. financial system — if it doesn’t follow through on a fresh round of United Nations restrictions against North Korea.
“If China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the U.S. and international dollar system — and that’s quite meaningful,” Mnuchin said during an event at CNBC’s Delivering Alpha conference in New York on Tuesday.
The Treasury Department under President Donald Trump has broadened its reach on North Korea by slapping sanctions against Chinese individuals and entities it’s accused of helping Pyongyang’s development of nuclear weapons and ballistic missiles.
“North Korea economic warfare works,” Mnuchin said. “We sent a message that anybody that wanted to trade with North Korea — we would consider them not trading with us.”
A consensus seems to be developing that harsh economic sanctions are the only plausible alternative to war and that makes major Chinese economic interests also vulnerable.
At a hearing of the House Foreign Affairs Committee on Tuesday, Republican Chairman Ed Royce said the U.S. should target major Chinese banks, including Agricultural Bank of China Ltd. and China Merchants Bank Co., for aiding Kim’s regime.
Russia also came in for criticism. Assistant Treasury Secretary Marshall Billingslea said in prepared remarks to the committee that North Korean bank representatives “operate in Russia in flagrant disregard of the very resolutions adopted by Russia at the UN.”
I think we can expect to see, in the next week or so, action taken against some of North Korea’s smaller trading partners. The action may not be directly punitive but rather a choice of whose business is most important to you: North Korea’s or the United States’s. I think we can also anticipate a small number of high profile sanctions imposes to impress upon Moscow and Beijing that the days of the rope-a-dope are over.