U.S. President Donald Trump, right, reaches to shakes hands with North Korea leader Kim Jong Un at the Capella resort on Sentosa Island in Singapore. (Source: PTI)

Trump Tried to Undo North Korea Penalty, Contrary to U.S. Account

(Bloomberg) -- President Donald Trump last week intended to reverse sanctions imposed on two Chinese shipping companies accused of violating North Korea trade prohibitions -- until officials in his administration persuaded him to back off and then devised a misleading explanation of his vague tweet announcing the move.

Trump stunned current and former government officials Friday afternoon with a tweet saying he had “ordered the withdrawal” of “additional large scale sanctions” against North Korea. For hours, officials at the White House and Treasury and State departments wouldn’t explain what he meant.

The president in fact intended to remove penalties Treasury had announced the day before against two Chinese shipping companies that had helped Pyongyang evade U.S. sanctions, according to five people familiar with the matter. Trump hadn’t signed off on the specific measures before they were announced but had given Treasury discretion to decide some sanctions as it saw fit, according to one person familiar with the matter.

Later Friday, in the wake of Trump’s tweet, the administration sought to explain away the move with a statement -- initially requesting no attribution to anyone -- that said the penalties against the Chinese companies hadn’t been reversed but the U.S. wouldn’t pursue additional sanctions against North Korea.

There were no additional North Korea sanctions in the works at the time, according to two people familiar with the matter.

Policy by Twitter

The people asked not to be identified in order to candidly describe last week’s events and the administration’s attempt to provide a cover story for the president. White House and Treasury communications staff didn’t comment on Tuesday.

Trump Tried to Undo North Korea Penalty, Contrary to U.S. Account

The episode unfolded in the hours before Special Counsel Robert Mueller submitted his final report to Attorney General William Barr, and it demonstrated Trump’s penchant for stumbling into policy via tweet -- a practice that often catches his own government off-guard. On Thursday, he announced in a tweet that the U.S. should recognize the disputed Golan Heights as Israeli territory, surprising State Department officials. In December, he said in a tweet that he would withdraw U.S. forces from Syria, against the advice of many top national security officials.

Senator Cory Gardner, a Colorado Republican facing re-election in 2020, blasted the Trump administration’s handling of North Korea sanctions at a Foreign Relations Committee hearing Tuesday morning.

“We now have sanctions that are being waived by the president after Treasury, by law, issues them,” he said. “This body ought to be growing more and more frustrated with the U.S. continuing to change our policy while Kim Jong Un sits back and continues to develop fissile material, nuclear weapons without doing a doggone thing except watch the United States change its negotiating position.”

NSC Meeting

The sanctions on the two Chinese shipping companies were the subject of a National Security Council principals meeting last week, according to two people familiar with the matter.

Robert Blair, a national security aide to White House Acting Chief of Staff Mick Mulvaney, warned that he didn’t think Trump would support issuing the measures. But National Security Adviser John Bolton, a North Korea hawk, disagreed and argued he knew Trump better than Blair, the two people said.

After the sanctions were announced, Bolton publicly applauded the move.

Trump Tried to Undo North Korea Penalty, Contrary to U.S. Account

“The maritime industry must do more to stop North Korea’s illicit shipping practices,” he said in a tweet, adding that “everyone should take notice and review their own activities to ensure they are not involved in North Korea’s sanctions evasion.”

The next day, Trump’s tweet shocked former Treasury officials, who said it risked undercutting the entire U.S. sanctions effort only to benefit North Korean leader Kim Jong Un’s regime.

“President Trump likes Chairman Kim and he doesn’t think these sanctions will be necessary,” White House Press Secretary Sarah Huckabee Sanders said in a statement after the tweet that didn’t explain which sanctions Trump had withdrawn.

‘Worst Tendencies’

One of the two Chinese shipping companies, Dalian Haibo International Freight Co. Ltd., is doing business with a sanctioned North Korean company, Treasury said in a statement on Thursday. The other, Liaoning Danxing International Forwarding Co. Ltd., was sanctioned for “operating in the transportation industry in North Korea,” Treasury said.

The U.S. also updated a North Korea shipping advisory on Thursday, adding dozens of vessels that are believed to have engaged in ship-to-ship transfers of oil with North Korean tankers or exported North Korean coal in order to evade sanctions.

Victor Cha, a North Korea expert at the Center for Strategic and International Studies who was considered to be Trump’s ambassador to South Korea, said at the Foreign Relations Committee hearing that Trump’s tweet “reinforces the worst tendencies which have actually led us to where we are now.

“The North Korean leader made clear what mattered to him in Hanoi,” where Trump and Kim met in February for their second summit. “He had his time with the president and the one thing he focused on was sanctions relief.”

©2019 Bloomberg L.P.