Coal and other minerals accounted for more than 40 percent of North Korean exports in 2015, followed by textiles (29 percent), metals (7 percent) and machinery (6 percent). North Korea’s biggest imports included textiles, machinery and raw materials including minerals, metals and plastics.
Though China has taken some steps to curb imports from North Korea, exports rose by nearly 30 percent in the first half of this year, according to Chinese customs data. During the six-month period, overall trade flows across the North Korean-China border rose 10 percent to $2.65 billion.
That’s why critics of the existing North Korean sanctions say the measures don’t go nearly far enough in cutting off the flow of cash and goods to the Pyongyang regime.
Some of those critics are calling for “secondary sanctions,” which would cut off trade and financial flows to any country doing business with North Korea.
“We say to China, ‘You have a choice whether you do business with North Korea or you do business with the U.S., but you can’t do both,'” Sen. Chris Van Hollen, D.-Md., told MSNBC on Thursday. “That is what got people’s attention with the Iran sanctions, and that’s what we need to do now.”
Last month, Van Hollen co-sponsored a bill with Sen. Pat Toomey, R.-Pa., that would impose secondary sanctions targeting third parties and countries that do business with North Korean companies and individuals.
Secondary sanctions offer a powerful financial weapon by allowing the U.S. government to bar foreign banks access to the U.S. financial system.
In late June, the White House imposed limited secondary sanctions on two Chinese citizens and a shipping company for helping North Korea develop nuclear weapons and also accused a regional Chinese bank, the Bank of Dandong, of laundering money for Pyongyang, Reuters reported.
Beyond cutting off cash and supplies to the North Korean regime, secondary sanctions squeeze the flow of cash to individuals, putting pressure on Kim’s political allies, according to David Cohen, a senior CIA official in the Obama administration.
“Imposing secondary sanctions would send a strong message to North Korean leader Kim Jong Un that the financial noose is tightening in a way that could drive a wedge between Kim and the Pyongyang elite critical to his continued hold on power,” Cohen wrote in a recent op-ed piece.
Imposing secondary sanctions that single out major Chinese banks and state enterprises comes with the risk of economic retaliation from Beijing.
To minimize that risk, the White House will need to build a much wider coalition of Asian countries, says Nicholas Burns, former U.S. ambassador to NATO during the George W. Bush administration.
But developing that coalition will be a tough task for an administration that has yet to fill dozens of key diplomatic positions. So far, the White House has filled fewer than half of the State Department positions that require Senate confirmation.
“It really is a time for diplomacy,” Burns told CNBC on Thursday. “But there’s no American ambassador to South Korea, there’s no secretary of State for East Asia. So, you’ve also got to fill out the ranks.”