Rex Tillerson Confirmation

Secretary Tillerson Draws a Line with North Korea

Secretary Tillerson Draws a Line with North Korea
Ty J. Young Editorial

Secretary of State Rex Tillerson had an eventful week while traveling to Asia. His stop in Korea included a speech in Seoul where he stated “military options” were on the table in dealing with the North Korean nuclear threat.

The North Korean nuclear weapons programs have been rapidly advancing. Their missile program has now reached the testing stage for intercontinental capability – which means the ability to deliver its payload to the U.S. mainland. North Korea most recently fired 4 missiles into the Sea of Japan on March 4, 2017, landing within 190 miles of the Japanese coast line. This was the most provocative and dangerous act the communist regime had taken to date, and the action helped bring greater support for the U.S. missile defense system being deployed to South Korea, known as THAAD (Terminal High Altitude Area Defense).

Diplomatic statements then ramped up – the Chinese called for cessation of the North Korean missile testing in exchange for the U.S. to suspend wargame drills with the South Koreans. The Chinese explicitly stated they wanted THAAD removed from the Korean peninsula. Secretary Tillerson then responded with America’s most muscular statement to date. In a joint press conference with South Korean Foreign Minister Yun Byung-se, Tillerson stated that the era of Washington’s “strategic patience” was over, that military options were on the table, and any action that would endanger U.S. forces would be met with the “appropriate response.”

It was stunning language coming from America’s top diplomat, and drew a line in the sand regarding how long the U.S. would allow North Korea to continue advancing with nuclear weapons.

With battle lines drawn, what are the “5 Things You Need to Know” regarding the US-North Korean nuclear program stand-off:

5 Things You Need to Know Regarding the U.S.-North Korean Nuclear Program Stand-Off:

1. The North Korean Nuclear Program goes back decades. North Korea has maintained a clandestine, and now public, nuclear power program since 1962, and it is believed their efforts to develop nuclear power covered for a nuclear weapons program. Initially denied by both the Soviet Union and China nuclear weapons technology, the North Koreans developed their own and were preventing UN inspectors from visiting their sites in 1993. It is believed they saw what happened to Iraq in the Gulf War and assumed nuclear weapons would be the only deterrent to a U.S. invasion. In 1994, the first can was kicked down the road as the Clinton Administration agreed to build nuclear power reactors and provide food to the North Koreans, in exchange for suspending their weapons program. Predictably, the North Koreans signed the deal but then simply cheated. Thanks to help from the AQ Khan network and the Pakistanis, the North Koreans developed a break-out program with their first underground test in 2006. They have been advancing their program, and their missile delivery capabilities, since then.

2. The political environment in South Korea makes our maneuvering room very small. With the impeachment of their President only a week old, the opposition party known as the Democratic Party of Korea will most likely win the next election. They favor engagement with North Korea, and smoothing relations with China. While that would be welcome, it could also be viewed as appeasement. Some question if the U.S. missile defense system will be sent home by the new, left-leaning government. THADD is the current U.S. missile defense system that can be used to shoot down intermediate range nuclear-armed ballistic missiles.

3. The Chinese play both sides of the fence in this stand-off. The Chinese certainly have a more difficult tightrope to walk than the U.S. North Korea is financially supported by the Chinese, and therefore America believes the Chinese have all the leverage over the North Koreans. However, China does not want a collapse of the North Korean regime, because they would have refugees flooding across their border, and most likely a U.S. beach-head on a unified Korean peninsula. From their perspective, the worst of all worlds. However, they are also facing the reality that they do not want the U.S. missile defense system in South Korea, and have reacted angrily to its implementation. So, while they don’t want a unified Korea, they also prefer that the North Koreans don’t agitate the U.S. into a broader military deployment.

4. Conflict between the U.S. and North Korea would be an economic catastrophe. $5 trillion worth of good traverse through the region each year … half the world’s cargo tonnage … one-third of all global maritime traffic annually … 60% of South Korea’s energy needs … even a non-nuclear military exchange would devastate the South Korean capital of Seoul with upwards of 250,000 casualties expected in the first week alone. Global commerce, as we understand it, would most likely grind to a halt.

5. Tillerson’s veiled threat of military options was necessary – as long as it is not a bluff. As stated above, a non-nuclear exchange would devastate the capital of South Korea. Most Pentagon analysts project the U.S. would move forces into the region from Guam, Hawaii and Japan. Assuming it did not escalate into a thermo-nuclear conflict, U.S. force projections combined with South Korean forces would defeat the North within 60-90 days. BUT – that is not how it plays out. Most now project a North Korean nuclear strike on U.S. bases in Japan. The testing by North Korea of intercontinental ballistic missiles suggest the possibility of a strike on the U.S. West Coast. U.S. political necessities would require a nuclear response, and then enters China. A U.S. pre-emptive strike could not guarantee we would be able to get all their nukes, and again, U.S. bombers heading towards the Chinese border would most likely lead to a Chinese response. In the end, there is a lot the U.S. can do short of war, but unlike the Obama red-line in Syria, it does no good to bluff or not be serious and then not follow through. If Tillerson was not bluffing, we have entered a new and more dangerous phase than ever before.

The dangerous nature of this issue goes straight to the heart of market gains and the protection of your money. The U.S. remains a safe haven, but as the risk of global conflict has increased, the direction of the stock market has become more volatile with each passing year. It may be time to move some of the gains from the last several years into a protected principal product. If you want to learn more, call us at 877-912-1919.

2 thoughts to “Secretary Tillerson Draws a Line with North Korea”

  1. Item#4. “Half the worlds cargo tonnage….”….????You are confusing Korea with the South China Sea, a zillion miles away from Korea. I’d suspect only about 2% of ‘the world’s cargo’ get anywhere near the Korean peninsula…

    1. Good point – they are two different areas on the map. What we are saying there in that subsection of the blog referred to what the conflict would do to the region, not just the Korean Peninsula. Economic transport in the REGION would be negatively impacted by war breaking out between the U.S. and North Korea, that is uncontroversial. The idea that conflict would be constrained to the 38th Parallel or the Yalu River is not what military planners suggest. – Ty J. Young Inc.

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