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STEEL Advisory Partners

Will there be

'Fire and Fury'

over the Korean peninsula?

Since the United States (US) President Donald Trump came in power last year, there has been a war of words between him and the North Korean leader Kim Jong-Un. Many words have been said and many statements made between both parties. Last August, Trump has even threatened to unleash 'fire and fury' over North Korea. Despite the war of words, all the threats made by Trump and the economic sanctions by the United Nations, the Democratic People's Republic of Korea (DPRK/North Korea) under Kim Jong-Un is still steady and is not crumbling down. 

 

With the nuclear test conducted by the DPRK last September as well as the many ballistic missiles launched over Japan, there is an increasing perception of a rising threat of ballistic missiles hitting America. According to the US Secretary of Defense Jim Mattis, North Korea is not an immediate threat to America, although it is rapidly building its nuclear and ballistic missile capabilities. Hence, one of the major risk in 2018 is whether the US will take a preemptive strike on North Korea, that may push the whole region into war. 

" Despite the war of words, all the threats made by Trump and the economic sanctions by the United Nations, the Democratic People's Republic of Korea under Kim Jong-Un is still steady and is not crumbling down. " 

Japan and South Korea protected by the US military

Both Japan and South Korea are protected by the US military. Under the Security Treaty between the United States and Japan, that was signed in 1951, the US is allowed to station its military troops within the Japanese territory. And under the Treaty of Mutual Cooperation and Security between the United States and Japan signed in 1952, the continued US military presence provides Japan military protection. As for South Korea, the US-South Korea alliance established after the World War II aims at deterring North Korea from invading the southern part. 

Despite all these treaties, the global geopolitical environment has drastically evolved nowadays. Japan as well as South Korea are feeling more and more threatened by the DPRK. After the World War II, the US was the major military super power. However, after the Kuwait war in 1991, then the 2003 military invasion of Iraq, and subsequently the war against Al Qaeda and ISIS, it will seem that the US has been involved in many military conflicts over a long period of time. And with all the American casualties and sacrifices made, there is little appetite for another war from the American public. Even if there are major US military deployments in Japan and South Korea, both countries have doubts about the US commitment in defending them against foreign threats like North Korea.

China's influence on North Korea

 

During the Korean war in 1950, North Korea was supported by China and the former Soviet Union against South Korea and the United States. Since then, China and North Korea have kept close relations - economically, politically and militarily. In 1975, former North Korean leader Kim Il-Sung wanted to invade the south again, but without the blessings from the Chinese leaders, it never occurred. Since 2003, to curb DPRK's ambitions of having the nuclear weapon, China has been involved in the six-party talks with North Korea together with Japan, Russia, South Korea and the US. And in 2009, the former Chinese President Hu Jintao and the former DPRK leader Kim Jong-Il celebrated the 60 years of diplomatic relations. 

In terms of trade relations, according to data from the International Trade Centre, the DPRK traded $739.8 million worth of goods with China in 2001. This amount increased by more than seven-fold to reach $5.38 billion in 2016. At its peak, the China-DPRK trade reached $6.56 billion in 2013. By and large, China represents more than 80% of the DPRK's global trade in 2016. Hence the North Korean economy depends significantly on China. Together with its political and military ties, North Korea is thus strongly influenced by China. 

" By and large, China represents more than 80% of the DPRK's global trade in 2016. Hence the North Korean economy depends significantly on China. "

Fire and Fury over the Korean peninsula

Even if Trump has threatened to have 'fire and fury' over North Korea, the risk of having a real war is lower than what is actually perceived. Indeed, being geographically so close, Japan and South Korea feel an existential threat with all the nuclear tests and missiles launches from the DPRK. However, if ever, North Korea strikes Japan and South Korea (or even the US), it is assured of a fast and furious military response, that will definitely obliterate the whole country. The massive US military presence in the region is acting as a huge deterrence for such reckless actions. 

Hence the question is whether the US will take a preemptive strike on the DPRK, that may potentially trigger a war in the whole region with China and Russia possibly taking part, like during the Korean war in 1950. From an economic, political/geopolitical and military perspective, there are undoubtedly many strong reasons that will make all potential parties involved very reluctant to take such drastic actions. 

First, from an economic perspective, a potential war over the Korean peninsula will not only drag Japan, South Korea and the US into recession, but also the whole world. After being involved in so many conflicts around the world for so long, another war may not be politically acceptable by the American public. With the geopolitical competition from China and Russia, war with North Korea will implicitly mean war with both countries for the Japan, South Korea and the US. In terms of military capabilities, not only North Korea is now capable of triggering a nuclear weapon, but both China and Russia have also been modernising their military over the years. Hence the US as well as South Korea and Japan will have to account for these factors in the event that they take a preemptive strike on the DPRK. 

 

Although so far, the bombastic exchange of words between Trump and Kim Jong-Un is more bark than bite, the situation within the region is tense and volatile. A miscalculation in the geopolitics and diplomatic exchanges can potentially spark a conflict that may escalate to a full war. However, with China's influence over the DPRK, and the preference for dialogue and diplomacy by Japan and South Korea as well as the US military deterrence, the likelihood for 'fire and fury' over the Korean peninsula is not high in 2018. Diplomacy will most likely prevail.

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