Business and financial analysis research

Standoff between US and North Korea

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The intercontinental ballistic missile program in North Korea and the ensuing war of words between the leaders of the United States and North Korea have dramatically escalated tension in the region.  The U.S. president Trump has options for dealing with North Korea aggression to change the current situation.

A Major military attack to destroy the regime.  Limited strike, tightening sanctions by putting oil on the list; make the ban on coal total, banning their national airline, and stopping their commodity exports, etc.  Have another round of negotiations with Kim Jong-un, to contact Pyongyang.

Military attack from an economic perspective, an outbreak of major hostilities on the Korean peninsula would shake the global economy.  The neighbor country, China may fear North Korea’s refugee immigration cause by the collapse of Kim’s government.  It is impossible to obtain the comprehensive sanctions desired because some countries, especially China.  Around 85 percent of North Korea's international trade is carried out wit China.  Both the U.S. government and the United Nations have released reports documenting North Korea’s extensive use of Chinese firms to export, borrow funds and import military equipment.   Both China and Russia voted to support the U.N. resolution; however, it is important to note that these two countries have a history of not rigorously enforcing sanctions against North Korea.

The economy of the West is far from safe from significant North Korea related volatility.  The effect on North Korean situation on their trade, currencies and share dealing impact all over the world base on their neighbor counties, China, Japan and South Korea, which have significant repercussions on international financial market.  Asian economy that could be heavily impacted by the crisis with North Korea is China, cause by large amount of international trade.  U.S. trade relation with China could also be affected. Japanese Yen which investor is seen as a safe haven currency investment.  It is difficult to solve the North Korea’s provocative actions; therefore, carefully watch North Korea and international market reaction.

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