published Mar 7th 2017, 6:00 pm, by David Tweed

(Bloomberg) —
Murder in Malaysia. Protests in China. And missiles flying toward Japan.

All can be traced back to North Korea and show how Kim Jong Un is managing to stir up tensions in the region while trying to provoke a reaction from U.S. President Donald Trump. The question for Trump, Xi Jinping and other leaders is how to respond, given sanctions, cajoling and military pressure have all failed to rein Kim in.

While Trump initially signaled he’d be open to talks, more recently he’s indicated he could follow Barack Obama’s lead in insisting North Korea abandon its nuclear program before negotiations can occur.

The stakes for Trump are potentially higher than Obama, given Pyongyang’s progress in developing an intercontinental missile capable of hitting the U.S. with a nuclear warhead. The recent events are probably Kim’s way — after a hiatus in his provocations — to try and force Trump to the table with concessions, analysts said.

“They decided to lay low doesn’t make sense, and that being on good behavior isn’t going to make any difference to the United States,” said John Delury, an associate professor of Chinese studies at Yonsei University in Seoul.

“I do think they want a negotiation,” he said. “They can read the reports. They know there is a North Korean policy review going on in Washington. This is a way to have an input into the discussion.”

On Monday, Kim oversaw the launch of four ballistic missiles, prompting phone calls between Trump and the leaders of Japan and South Korea. A day later his regime banned Malaysians from leaving the country amid a spat over the murder of his half brother, prompting Prime Minister Najib Razak to warn North Korea is “effectively holding our citizens hostage.”

Also on Tuesday, Trump pledged “very dire consequences” for Kim’s provocations while affirming support for Japan and South Korea, which rely on the U.S. military presence in North Asia.

The U.S. announced meanwhile that it had started to deploy its Thaad missile-defense shield in South Korea, a move that has riled China.

While the U.S. military said the system was aimed solely at defending South Korea against North Korean missiles, China sees Thaad as a threat to “the strategic equilibrium in the region.” It has now suspended the operation of around 40 Lotte Mart stores after the South Korean retail conglomerate agreed to sell land for the missile system, and ordered travel agents to stop selling tour packages to South Korea.

Lotte Shanghai Foods, a joint venture with Hershey Co., has been told to suspend production at its Chinese factory for a month due to insufficient fire-safety facilities, South Korea’s Maeil Business Newspaper reported.

North Korea’s provocations resumed last month after a relative lull. It stopped firing missiles in the last two months of the year after launching at least 24 projectiles and detonating two nuclear devices.

On the campaign trail, Trump sent signals he’d be open to discussions with Kim. “ What the hell is wrong with speaking?” he said in June. There had also been calls for talks from North Korean watchers who increasingly saw Obama’s strategy for dealing with North Korea — sanctions and pressure on Kim’s ally China to do more — as a failure.

Sticks, Carrots

“Efforts over the past eight years to slow the North down and prevent it from achieving this goal, relying on a mix of puny sticks and carrots plus otherwise trying to ignore the problem, have been unsuccessful,” Joel Wit, a former state department official who met North Korean diplomats in Geneva, wrote in The Atlantic in November after the meeting.

Yet at the start of the year, Trump signaled he’d revert to Obama’s policy. He vowed to prevent Pyongyang from developing the capability to strike the U.S. with a missile — without saying how — and harangued China for not doing enough to deal with North Korea.

“Given North Korea’s recent behavior, we’re not at the point where we’re looking at direct engagement,” State Department spokesman Mark Toner said Tuesday at a briefing.

While Pyongyang spars with its North Asia neighbors there’s also friction with Malaysia after Kim Jong Nam — Kim Jong Un’s half-brother — was killed at a Malaysian airport. Authorities found evidence he was murdered using VX nerve agent, and sought to question a North Korean diplomat who has been holed up at the embassy.

North Korea on Tuesday banned all Malaysians from leaving until it could ensure its citizens were safe. Najib called the act “abhorrent” and said Malaysia “will not hesitate to take all measures necessary” to protect its citizens. Malaysia has said it will now ban North Koreans in the country from leaving.

Coal Imports

The murder had other ramifications. China, which was reportedly protecting Kim Jong Nam, banned all coal imports from North Korea, prompting the regime to lash out. The U.S. also reportedly canceled another round of informal talks with North Korean officials that had been scheduled for early March.

The rhetoric from North Korea is as dire as ever. In a letter to the United Nations Security Council, North Korea’s ambassador to the UN complained about U.S.-South Korean military exercises that began in early March, warning they risked driving the peninsula and northeast Asia toward a “nuclear disaster,” the Associated Press reported.

Still, Kim wants to stay alive and in power rather than end up a martyr, according to Daniel Pinkston, a Seoul-based lecturer in international relations with Troy University.

“They will talk to anyone, anytime and anywhere,” Pinkston said. “But as far as there is anything to be bargained over: I see it as deadlock.”

–With assistance from Ting Shi, Kanga Kong and Heejin Kim.To contact the reporter on this story: David Tweed in Hong Kong at dtweed@bloomberg.net To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net Rosalind Mathieson
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