China caught with its’ hands in the North Korean cookie jar

America has been building the political pressure towards both North Korea and China to bring about a peaceful resolution to North Korea’s nuclear ambitions. That pressure reached white hot levels when America orchestrated the capture of the Hong-Kong-flagged oil tanker which was accused of transferring 600 tons of refined oil to a North Korean ship in October in violation of United Nations sanctions. This brought into the light a matter that has been known for years....that China supports North Korea and its’ ambitions by providing the energy with which it keeps its lights on. 

The revelation of the South Korean seizure of the 11,253-ton Hong Kong-flagged oil tanker came a day after President Donald Trump accused China of letting fuel oil flow into North Korea through illicit ship-to-ship transfers on international waters. It is a major step as it brought into the open that America’s real enemy on the peninsula is China rather than North Korea.  Consequently the revelation has paved the way for American direct military action, but before it could escalate to these levels the North Korean’s suddenly sought to negotiate with South Korea using the Olympics as a pretext. In so doing the North Korean’s out manoeuvred America by seeking to separate them from their South Korean allies and buy more time. As a result Kim will have time to progress his nuclear ambitions until at least the end of the winter Olympics, thereby strengthening his hand. However, once they are over we expect that Chinese American relations will continue to deteriorate and America will be forced to act unilaterally with overwhelming force.

Simultaneously, the false Hawaiian nuclear alarm showed how seriously Hawaiian citizens take a nuclear attack and if left unimpeded the North Korean threat means that west coast citizens could soon echo that fear. An emotion that will add to Trump’s desire to eradicate the threat completely with military force, and then face off with China in an inevitable trade war over China’s annual $350bn trade surplus. Indeed there are investigations underway in Washington over Chinese dumping of aluminium and steel which are considered to be unfair trade practices. However, BTCH  would argue that Trump’s opening shots were fired last week with the introduction of 30% tariffs on Chinese solar panels. We expect this situation to worsen in the weeks and months ahead and to in all probability be the catalyst for the US stock market to reverse its course and follow the dollar downwards.