Kim’s Nukes and Trading with China

Kim’s Nukes and Trading with China                                             

During President Obama’s second term North Korea conducted three nuclear tests, launched two satellites into low-earth orbit, and successfully flight-tested road-mobile and submarine-launched intermediate-range ballistic missiles. Experts estimate North Korea may have twenty or more operational nuclear-armed medium-range ballistic missiles and be the able to deliver a nuclear-tipped ICBM to the US mainland at some point during the Trump presidency. US presidents have claimed they would not allow this, however none has succeeded at undermining this threat or in eliminating China’s support for the Kim regime. After years of strategic patience something must be done in a hurry.

President Xi and Kim Jong-un must feel uneasy about a conservative populist Trump presidency. A more transactional Make America Great Again policy may insist on a grand bargain to rebalance US-China trade and denuclearize North Korea. As the preponderant economic and military power in the world today, the United States has considerable leverage to achieve both objectives.

Since North Korea has a GDP similar to the poorest countries in Africa, Americans ask how it can afford its nuclear missile program? According to a Congressional research report, while purchasing 90 percent of its commercial exports, Beijing provides 80 percent of North Korea’s consumer goods, 90 percent of its’ energy, $100 million in UN banned luxury items, and enough food to feed over a million people per year. From available trade data I calculated that in addition to $1.2 billion in direct aid, North Korea received a $1.1 billion strategic discount on imports and profited $3 billion on exports to China in 2015; $7.8 billion total trade and aid resulted in a $5.3 billion fungible profit that may have paid for 90% of North Korea’s $6 billion military budget, including two nuclear tests and almost two dozen ballistic missile launches in 2016.

Despite denial and deception, it is obvious China supports North Korea for security reasons. After establishing Pakistan as a nuclear power on one flank, China prefers a surrogate ally with nuclear muscle on its other flank. Indeed, this relationship would dissolve if the Kim regime’s nuclear threat to the United States were unacceptable to China’s geostrategic objectives. Beijing would surely withhold support if Pyongyang started selling weapons to Xinjiang rebels or to the Dali Lama.

When America welcomed China into the WTO in 2001 it did not imagine Beijing would use its favorable trade status as a weapon to oppose US interests. Beijing’s monetary and protectionist trade policies have hurt American workers, brought national deficits, and underwritten North Korea’s nuclear-missile threat to our homeland. Americans are realizing that importing/buying Chinese products is paying for their unemployment while bankrolling the modernization of a Chinese military that may one day kill their sons and daughters.

Unencumbered trade policy has not made Americans richer or safer. The greatest paradox of our time is that Americans have funded their own geopolitical and geoeconomic decline. With a populist mandate President Trump may be compelled to modernize US policy and force China to comply with fair trade and denuclearize North Korea, and help Make America Great Again.


SHEPHERD IVERSON is a foreign professor in the Institute for Korean Studies at Inha University in South Korea.

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