North Korea’s Nuclear Test to Hit China’s Business Relations

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The tensions over the expansion of North Korea’s nuclear capabilities over the last few months has reached a new peak in the last weekend when the sixth and the most potent nuclear test was conducted by North Korea. Japan, South Korea, and the U.S. are on high alert, and the president of the U.S., Donald Trump, is accelerating his rhetoric towards the economies who, still, are in business terms with North Korea.

On Sunday Sep 03, after the news broke about the latest test, President Trump tweeted that the U.S. is considering to sever all trade ties will any country, which continues to have business connections with the Kim Jong-Un-led nation. Currently, China is doing crude oil business with North Korea and the scenario does not look to change in the next few years.

The U.S., so far, has aimed at only small-scale Chinese companies and banks for trading with North Korea and supporting its economy; however, Trump has warned that they may cast a bigger net, which may harm some big names in the Chinese oil industry. The prospect of wider sanctions against leading Chinese enterprise could cast negative impact the U.S. operations of a number of China-based oil giants and various prominent banks of Beijing with assets in the U.S. However, a significant widespread sanctioning of key Chinese firms may result in retaliation on the U.S. firms, such as S&P 500 enterprises, with operations in China.

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