Global Geo-political Series: U.S. threatens to cut China’s dollar access if sanctions on DPRK not implemented

On Monday, United Nation’s Security Council imposed tougher sanctions on North Korea unanimously that bans North Korea’s textile exports and impose a cap on oil products exported to North Korea. Textiles are North Korea’s second biggest revenue generator and is primarily gets exported to China. China also provides 90 percent of North Korea’s fossil fuel. This is not the first time UNSC came together and unanimously imposed sanctions on the hermit nation. Since 2006, UNSC unanimously voted nine times to impose sanctions on North Korea but that has not stopped the isolated country to improve its ballistic missile capability as well as nuclear arms capability. Critics say that those imposed sanctions were not carried out by countries like China and Russia, two of DPRK’s closest partners.

United States under the Trump administration is not only taking a tougher stand against North Korea but against the countries which provide assistance to DPRK, namely China. U.S. Treasury Secretary Steven Mnuchin said, “North Korea economic warfare works…..We sent a message that anybody who wanted to trade with North Korea, we would consider them not trading with us….if China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the US and international dollar system.”

China is a major trading partner of the United States, which has an annual deficit of $350 billion with China and it is a major debtor to the communist nation, which holds more than a trillion dollar worth of U.S. government bonds. If the United States does move ahead with sanctions on China, it could bring about unforeseen catastrophe in the global markets and international trade.