Trump orders new sanctions against North Korea, Kim calls him 'deranged'

Tensions have risen as Pyongyang has resisted intense international pressure and the rhetoric between Trump and Kim Jong Un has also escalated. The U.S. president on Tuesday called him a 'rocket man' on a suicide mission and Kim described Trump early on Friday in Asia as "mentally deranged".

The escalating rhetoric came as even the U.N. Secretary General called for statesmanship to avoid "sleepwalking" into a war. South Korea, Russia and China all urged calm.

Kim said the North would consider the "highest level of hard-line countermeasure in history" against the United States in response to Trump's threat to "totally destroy" the North in his first speech to the United Nations on Tuesday.

Pyongyang conducted its sixth and largest nuclear test on Sept. 3 and has launched numerous missiles this year, including two intercontinental ballistic missiles.

Under Kim, North Korea has launched dozens of missiles as it accelerates a programme aimed at enabling it to target the United States with a nuclear-tipped missile.

In his sanctions announcement on Thursday, Trump stopped short of going after Pyongyang's biggest trading partner, China, praising as "tremendous" a move by its central bank ordering Chinese banks to stop doing business with North Korea.

The additional sanctions on Pyongyang, including on its shipping and trade networks, showed that Trump was giving more time for economic pressures to weigh on North Korea after warning about the possibility of military action on Tuesday in his first speech to the United Nations.

Asked ahead of a lunch meeting with the leaders of Japan and South Korea if diplomacy was still possible, Trump nodded and said, "Why not?"

Trump said the new executive order gives further authorities to target individual companies, financial institutions, that finance and facilitate trade with North Korea". It "will cut off sources of revenue that fund North Korea's efforts to develop the deadliest weapons known to humankind."

The U.S. Treasury Department now had authority to target those that conduct "significant trade in goods, services or technology with North Korea."

Trump did not mention Pyongyang's oil trade. The White House said North Korea's energy, medical, mining, textiles and transportation industries were among those targeted and that the U.S. Treasury could sanction anyone who owns, controls or operates a port of entry in North Korea.

U.S. Treasury Secretary Steven Mnuchin said banks doing business in North Korea would not be allowed to also operate in the United States.

"Foreign financial institutions are now on notice that going forward they can choose to do business with the United States or with North Korea, but not both," Mnuchin said.

On Wednesday, U.S. Secretary of State Rex Tillerson said there were "some indications" that sanctions were beginning to cause fuel shortages in North Korea.

Trump's U.N. address was the most direct military threat to attack North Korea and his latest expression of concern about Pyongyang’s repeated launching of missiles over Japan and underground nuclear tests.

The U.N. Security Council has unanimously imposed nine rounds of sanctions on North Korea since 2006, the latest this month capping fuel supplies to the isolated state.

European Union ambassadors reached initial agreement to impose more sanctions on North Korea, going beyond the latest U.N. measures, officials and diplomats said.

"DANGEROUS DIRECTION"

South Korean President Moon Jae-in, who met with Trump on Thursday and addressed the U.N. General Assembly, said sanctions were needed to bring Pyongyang to the negotiating table, but Seoul was not seeking North Korea's collapse.

"All of our endeavours are to prevent war from breaking out and maintain peace," Moon said in his speech. He warned the nuclear issue had to be managed stably so that "accidental military clashes will not destroy peace."

China's foreign minister Wang Yi urged North Korea not to go further in a "dangerous direction" with its nuclear programme.

"There is still hope for peace and we must not give up. Negotiation is the only way out ... Parties should meet each other half way, by addressing each other’s legitimate concerns.”

He later told a Security Council meeting that "confrontation and sanctions alone only lead to escalation of conflicts".

Russian Foreign Minister Sergei Lavrov condemned Pyongyang's missile and nuclear "adventures" but warned "military hysteria is not just an impasse, it’s a disaster."

In Geneva, North Korea told a U.N. rights panel sanctions would endanger the country's children.

Joseph DeThomas, a former State Department official who worked on Iran and North Korea sanctions, said the order would make U.N. resolutions more effective while not initiating an economic war with China, but added:

“Unfortunately, after the president's U.N. speech, it is very unlikely this will have a positive effect. At this point, no matter how many sanctions are piled on, the current government of North Korea simply cannot give in."

The United States and South Korea are technically still at war with North Korea because the 1950-53 Korean conflict ended with a truce and not a peace treaty.