Impact of US Trade Policies on North Korea and Global Business

This essay analyzes the implications of US trade policies towards North Korea, focusing on the potential impacts of restricting trade with countries that do business with North Korea. It explores the economic consequences for both the US and North Korea, highlighting how such policies could affect multinational companies and global supply chains. The author argues that the US might suffer more economically than North Korea and suggests alternative strategies such as investing in military strength and working with key allies like China to address North Korea's nuclear program more effectively. The essay emphasizes the importance of international relations in trade and the potential for US policies to backfire, ultimately concluding that a strong defense may be a more effective deterrent than economic sanctions.

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INTRODUCTION TO INTERNATIONAL BUSINESS
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It is not a good idea for United States to continue pushing other countries to stop
trading with North Korea (Jeffries, 2010). The manner in which the two countries relate is not
the manner in which north Korea relate with other countries. In fact, there some countries like
China and India relate well with the country in terms of trade.
US is a strong country in terms of economy and development. Stopping other
countries which want to build their economies through trading with North Korea will not be
right. International trade plays a significant role in assisting a country to get what it does not
have (Taylor, 2010). For example, there are countries which rely on coal and other minerals
from North Korea. Failing to trade will mean such countries will experience some challenges
and will have to seek for an alternative country where they can get those products.
Although in terms of global trade North Korea is not a big player, the few countries it
trades with are big players (Gause, 2011). For example, china is the biggest world’s export
economy and is the North Korea’s biggest trading partner followed by India. If for example
US pushes china to stop trading with North Korea, there will be impact to not only North
Korea but also to china.
Most of the nations which trade with North Korea also do business with the United
States, and influencing the US economy much more than they impact the tiny North Korean
economy (Jung, 2016). Some of these countries like for example China have serious effect on
US economy. Terminating the trade between United States and china will cost US all jobs
associated with goods and services exported to china.
Anything that affects China would necessarily have an effect to the global economy
(Kim, 2013). Research suggest that if US was to stop purchasing goods and services from
china, the likely impact would be costing the country at least 3% of GDP. This decision

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would also affect Asia because China is one of the biggest trading partner with most of the
countries in that continent.
International relationship plays a significant role in international trade. Positive
relationship will make a country to attain products which it does not have through imports
and get market for its surplus through exports (Rennack, 2015). If Trump was to implement
his decision, US may suffer much more than North Korea because the country seems to mind
less about the welfare of its citizens and putting much efforts on its military. The country is
ready for its citizens to starve as long as the military is well equipped. In fact, trump’s
direction might make the Americans suffer more and have less impact North Korean’s
nuclear program.
One of the possible outcome of North Korea and the world should other countries
decide not to trade with north Korea is significant economic impact. Although North Korea
plays limited role when it comes to international trade, there are various countries which
depend on importing and exporting products to and from this country (Wertz, 2013). Some of
these countries comprise of China, Thailand, Russia, France, Singapore, Mexico and Taiwan.
A country like China is North Korea’s primary defence and also a business partner,
contributing to almost 90 percent of its total trade. If this country follows Trump’s direction
of not trading with this North Korea, it will realize serious economies impact based on the
fact that they will not have market for some of their products.
North Korea will also suffer serious economic crises because it may experience rises
in demand with limited supply of goods. US also depends on other countries for trade (Huish,
2017). If it bans engaging in trade with countries which trade with North Korea, it means it
will also experience serious economic crises. For example, China is a mutual trade partner
between the two countries. If US bans trading with it because it trades with North Korea, it

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means the products which the United States was receiving from china in terms of imports will
no longer exist for the Americans.
The aim of Donald’s decision is to make North Korea to experience economic
problems so that it may lack resources which can support its Nuclear Programme. Although
North Korea is a minor player in international trade, Trump’s direction can only make the
country to experience financial impact if key players like China and India plays a role
(Neberai, 2015). If the two countries play a role, the country will experience some financial
challenges the problem may be faced by the citizens and not the military.
Estimates suggest that one-third of North Korea GDP is based on trade, especially
selling coal and minerals. Lacking market for these products might bring economic crises
which will impact its citizens but not enough to severely dampen internal resources which the
country might be devoting to military arms (Chung, 2016). Although the country may
experience economic pressure and lack options to ease the pain which might result, the
government has already shown less concern for welfare of other people, allowing them to
starve and live in misery while dedicating a lot of money and other resources to the military.
North Korea has relations and presumably trade with 181 countries. Cutting off the
trade between US and any country which trade with North Korea will mean some countries
will lack market for some of their products (Gause, 2011). This means the decision will make
other nations including the United States to experience challenges but have less impact on
North Korea because the country is not a key player in international trade. The past sanctions
only impacted approximately $1 billion of North Korea’s $3 billion in trade. This means
Trump’s decision will make his country suffer but fail to meet its target.
The nuclear programme issues between US and North Korea can have a significant
impact on multinational companies, based on the fact international relations plays a

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significant role in making decisions on which country is fine to expand a business to (Jeffries,
2010). Trump’s decision of cutting off trade partnership with countries which do business
with North Korea also means not allowing companies from those countries to operate
businesses in United States.
Trump’s direction will also impact supply chain processes of some of the
multinational companies. This is because some of the companies have supply chains which
include transporting their products to other countries (Kim, 2013). If trump implements his
decisions, such companies will need to restructure their supply chains because the ban will
mean some companies may not be able to transport their products to some countries.
Economic impact in countries that will cease from trading with either US or North
Korea will not only impact domestic companies but also multinational companies. If for
example China seizes trading with North Korea, multinational companies targeting Chinese
market will be significantly impacted (Neberai, 2015). If some of the countries depend on
products imported from North Korea or exports their products to this country, it will mean
they may either look for other alternatives or close down their businesses.
Trump’s trade threats are likely to backlash or make him experience various
consequences which will significantly impact his country. The effectiveness of his decision is
questionable, based on the fact that it is more likely to harm United States economically than
challenging North Korea’s nuclear option (Rennack, 2015). If I was presenting American
government, I would use seek for ways which would have direct impact on North Korean’s
nuclear program and less impact on US economy.
Economic sanctions would be an effective strategy of creating hardship on North
Koreans but may not be an effective strategy to prevent the war. The best way to deterrent to
a war is a strong defence. US can challenge North Korea by investing much on the military to

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ensure it has more advanced equipment (Rennack, 2015). This would make North Korea to
feel a challenge and decide to withdraw its nuclear program. The fact that North Korea invest
much on the military, it will always keep threatening United States because it feels to be
more superior in terms of military technology and expertise. Trump should make the country
to see that the United States has all what it can take to win the war through dedicating enough
resources to its military.
As long as the North Korean government has already shown less concern for the
welfare of its citizens, it will continue to devote huge amounts of resources to the military.
This means even if the country is economically impacted, it will still use the little resources it
has to finance its nuclear programme. US can challenge this programme if US government
works behind the scenes with china and other countries which are technologically developed
and with direct impact on North Korean economy (Taylor, 2010). Several times, US has tried
to use the same strategy but has never worked. China, accounting for approximately 90% of
trade with its neighbours, could have an impact but has concerns over the possibility of a
large refugee influx and the implications of regime change in North Korea. Sanctions can
have little impact not unless widely respected. In this case, North Korea, Iran, Cuba, Russia
and other countries could step in to fill the void.

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