Trump Says Talk With North Korea Done as Mattis Urges Diplomacy

(Bloomberg) -- The Trump administration delivered mixed signals on North Korea’s latest provocation with the president dismissing the idea of negotiating with Kim Jong Un’s regime and his defense chief saying the U.S. hasn’t exhausted its diplomatic options.

After suggesting last week that North Korea’s leader “is starting to respect us,” President Donald Trump on Wednesday returned to his tougher line after Kim’s government fired a missile over northern Japan and issued a vague warning about containing U.S. forces on Guam.

“The U.S. has been talking to North Korea, and paying them extortion money, for 25 years. Talking is not the answer!” Trump said in a Twitter post.

But Defense Secretary Jim Mattis answered “No,” when asked Wednesday whether Trump’s comments mean the U.S. and its allies have taken diplomacy as far as it can go.

“We’re never out of diplomatic solutions,” Mattis told reporters as he met with South Korean Defense Minister Song Young-moo at the Pentagon.

The U.S. has alternated between threats and conciliatory language in responding to North Korea’s threats and missile tests as the Trump administration grapples with a mercurial adversary that has vexed U.S. presidents for decades. 

‘Fire and Fury’

After Kim tested a missile and then threatened the U.S. territory of Guam in early August, Trump said the American military would unleash “fire and fury” on North Korea if he followed through. But a brief pause in North Korean missile tests prompted a change in tone.

Secretary of State Rex Tillerson said last week that the regime in Pyongyang “has certainly demonstrated some level of restraint that we have not seen in the past.” Trump himself said he saw a change. “I respect the fact that I believe he is starting to respect us,’ he said at a political rally on Aug. 22.

A State Department spokesman said Trump on Wednesday was pointing out that previous attempts by the U.S. to build a dialogue with North Korea, including providing humanitarian aid, have been met by continued provocative rhetoric and actions and the country’s active development of nuclear weapons.

“We will continue to increase the weight of our peaceful pressure campaign,” the spokesman, R.C. Hammond, said in an email. “Economic, Diplomatic, Military, all of these options are on the table – and we have a resolute Commander in Chief who is making it very clear: North Korea needs to choose a new path.”

Senate Briefing

The Trump administration is planning to brief the full Senate next week on the situation. Mattis, Tillerson, General Joseph Dunford, chairman of the Joint Chiefs of Staff, and Director of National Intelligence Dan Coats are slated to meet with the senators behind closed doors.

While the earlier threats and counter-threats rattled markets, investors have begun discounting the rhetorical exchanges. U.S. equities were little changed after Trump’s tweet on Wednesday morning. European stocks had followed most Asian equities higher earlier on optimism that the anxiety that followed North Korea’s launch this week of a missile over Japan was receding.

Kim said Tuesday’s missile test was a “meaningful prelude” to containing the American territory of Guam, and that he will watch the U.S. response before deciding on further action.

Russian Foreign Minister Sergei Lavrov, on a phone call Wednesday with Tillerson, warned against any military moves against North Korea, which he said would have “extremely unpredictable” consequences. He also said toughening sanctions further against North Korea would be “counterproductive and dangerous,” according to a statement from Russia’s foreign ministry.

In a twist of timing, the Pentagon on Wednesday said it successfully conducted a missile defense test, intercepting a medium-range ballistic missile off the coast of Hawaii in a repeat of an earlier successful intercept using a Raytheon Co. SM-6. The test had been scheduled prior to the latest round of tensions with North Korea.

Kim guided his nation’s firing of the intermediate-range strategic ballistic rocket and urged the military to conduct more such launches into the Pacific Ocean in the future, according to a statement from the official Korean Central News Agency.

The missile firing was part of "muscle-flexing" to protest annual military exercises being held between the U.S. and South Korea, KCNA said. It was the first North Korean projectile to fly over Japanese airspace since the regime launched a rocket over Okinawa in 2016.

In separate calls earlier this week, Tillerson agreed with his Japanese and South Korean counterparts that the test was "was an escalation of North Korean provocations and showcased the dangerous threat posed by North Korea." The United Nations Security Council said in a statement Tuesday that it "strongly condemns" the launch.

China is working with the security council in response to the tests, but doesn’t favor unilateral sanctions against North Korea, Foreign Minister Wang Yi said at briefing in Beijing on Wednesday.

"China and the DPRK are neighbors, we have a traditionally friendly relationship," Wang said, referring to North Korea’s formal name. "This is a fact, but at the same time the behavior of the DPRK has violated UN Security Council resolutions and as a member of the security council and a responsible major country...it is necessary for us to make our opposition clear."

KCNA said that Kim approved the missile test to "make the cruel Japanese islanders insensible on bloody August 29 when the disgraceful ‘Korea-Japan Annexation Treaty’ was proclaimed 107 years ago."

Japanese Prime Minister Shinzo Abe on Tuesday called the launch "an unprecedented, grave and serious threat,” while Trump reiterated that “all options” are under consideration in response to Pyongyang’s actions. Abe and South Korean President Moon Jae-in agreed in a call Wednesday to raise pressure on North Korea to the "maximum" level, according to a statement by Moon spokesman Park Su-hyun.

North Korea has shown recent advancements in its technology by testing intercontinental ballistic missiles at high altitudes, reflecting progress toward being able to reach the continental U.S. with a nuclear warhead. That has happened despite further international sanctions aimed at squeezing Kim’s economy.

--With assistance from Kanga Kong Peter Martin Samuel Potter Tony Capaccio Nick Wadhams Laura Litvan and Henry Meyer

To contact the reporters on this story: Joe Sobczyk in Washington at jsobczyk@bloomberg.net, Shinhye Kang in Seoul at skang24@bloomberg.net.

To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net, Michael Shepard at mshepard7@bloomberg.net, Joe Sobczyk, Bill Faries