U.S. official: 'People need to isolate North Korea'

Experts: Tremors 10 times stronger than before
Experts: Tremors 10 times stronger than before

Treasury Secretary Steven Mnuchin says he's drafting new sanctions to put economic pressure on North Korea.

His words came after the isolated Asian nation carried out its most powerful nuclear test yet.

"I am going to draft a sanctions package to send to the president for his strong consideration that anybody that wants to do trade or business with them would be prevented from doing trade or business with us," Mnuchin said on Fox News Sunday. "People need to cut off North Korea economically. This is unacceptable behavior."

Related: What's left to sanction in North Korea

A few hours after Mnuchin's television appearance, President Trump doubled down on the issue.

"The United States is considering, in addition to other options, stopping all trade with any country doing business with North Korea," he tweeted.

But experts were highly skeptical about such a move.

North Korea's biggest trading partner is China, the world's second largest economy. Cutting off U.S.-China trade would be hugely damaging to both countries and the broader world economy.

Total trade between the U.S. and China reached nearly $650 billion last year, according to the Office of the U.S. Trade Representative. China is the U.S.'s largest trading partner in goods.

The U.S. has taken recent steps to pressure companies and individuals who it believes work with North Korea.

In June, the Treasury moved to block a Chinese bank with alleged illicit financial ties to North Korea from gaining access to the U.S. banking system.

But Mnuchin said Sunday that the U.S. can do more, and plans to work with its allies and China to squeeze North Korea.

"China has a lot of trade with them," Mnuchin said. "There's a lot we can do to cut them off economically — much more than we've done already."

China has served as an economic lifeline for North Korea through years of international sanctions, letting fuel and coal cross their shared border, providing huge amounts of food aid and allowing its companies to trade with the isolated state.

China, which accounts for roughly 90% of North Korea's international trade, backed the latest round of U.N. sanctions against its smaller neighbor.

Related: Trump says appeasement 'will not work' after N.K. nuclear test

The nuclear weapon test on Sunday was the sixth-ever for North Korea, and the first since Trump took office. The country claimed that it has developed an advanced hydrogen bomb that can fit atop an intercontinental ballistic missile.

Earlier Sunday, Trump called Pyongyang's words and actions "hostile and dangerous." He tweeted that South Korea has found that their "talk of appeasement will not work."

When asked if the U.S. will consider a military response, Mnuchin said Sunday that the administration is "not going to broadcast" its planned course of action.

But he added that Trump has made it clear that "this isn't the time for just talk."

--CNN's Angela Dewan and Taehoon Lee and CNNMoney's Jethro Mullen and Charles Riley contributed to this report.

Personal Finance


CNNMoney Sponsors