America has underestimated North Korea since the first days of the Korean War. Once news broke that Kim Il-sung, Mr. Kim’s grandfather, had ordered the North’s invasion of the South in June 1950, the Truman administration assumed that the move was a prelude to a vaster, coordinated expansionist plan masterminded by the Communists in Moscow and Beijing. An official in the State Department is said to have compared the relationship between Stalin and Kim Il-sung to that between Walt Disney and Donald Duck. But after Soviet archives were opened following the collapse of the Soviet Union in 1991, it became clear that the war had been Kim Il-sung’s idea, and that he had repeatedly pleaded with both Stalin and Mao to support his bid to take over the whole of the Korean Peninsula.
History, in other words, demonstrates that the North Korean government has both an offensive and a defensive game plan, and that it sticks to an established playbook.
History also shows that while North Korea is vulnerable to targeted financial sanctions, the United States, as I have written before, hasn’t put its full weight behind a sufficiently severe sanctions program. Between 1995 and 2008, the Clinton and George W. Bush administrations even handed the government in Pyongyang some $1.3 billion in assistance, largely in the form of food and energy.
Contrary to the popular myth — blithely repeated by pundits, journalists and policymakers — North Korea is not the most heavily sanctioned nation on earth. And it still isn’t after tighter penalties were imposed on it in February 2016, largely for lack of enforcement.
Sanctions today are smart weapons, unlike the clunky, one-dimensional prototypes of the Cold War. In its efforts to clamp down on terrorist funding, the Treasury Department discovered that financial sanctions aimed at both one’s primary target and its partners can be highly effective tools of pressure. (Fines on banks and companies that were doing business with Iran were one reason its government returned to the negotiating table in 2013.) Yet, North Korea still “enjoys ongoing access to the international financial system,” according to a March report by the United Nations Panel of Experts on North Korea sanctions.
Because the dollar accounts for nearly 62 percent of all foreign exchange reserves worldwide, the United States government has tremendous leverage: It can freeze the offshore assets of the North Korean leadership, as well as fine in the billions of dollars any third parties that enable it.