pivots

The Lee Jae Myung government has shifted its focus to a peaceful “two-state” coexistence with North Korea, rather than pressure and confrontation, the unification ministry’s white paper showed Monday, striking a markedly different tone from its predecessor.

The annual paper reflects the push by the Lee government, which took office in June last year, to repair the strained inter-Korean relationship based on building mutual trust.

The previous conservative Yoon Suk Yeol government sought to bring about change in North Korea through pressure and the influx of outside information.

The latest white paper laid out three key guiding principles: Seoul respects North Korea’s system, does not pursue unification by absorption and does not engage in hostile activities.

Built on these principles, the government has framed its overarching policy as one of “peaceful coexistence and mutual growth on the Korean Peninsula.”

In particular, regarding Pyongyang’s “two hostile states” policy, the document specified the ministry’s stance that highlights the need for a transition to a “peace-oriented two-state relationship” aimed at achieving unification.

At a year-end party meeting in December 2023, the North Korean leader declared inter-Korean relations as those between “two states hostile to each other” and has since pursued hostile policies toward Seoul.

“Considering the reality that the South and the North exist as two de facto states, we intend to develop inter-Korean relations into a relationship of peaceful coexistence while still aiming for unification,” the ministry said.

Critics said the ministry’s “peace-oriented two-state relationship” narrative runs counter to the long-held stance that inter-Korean ties are a “special relationship” tentatively formed in the process of seeking unification, not as state-to-state relations.

Among the measures cited is the Lee government’s decision to halt the sending of anti-Pyongyang leaflets to North Korea and stop loudspeaker broadcasts along the border as steps to ease military tension and rebuild trust.

The paper also outlines plans to revive the Sept. 19 inter-Korean military agreement, signed by former President Moon Jae-in and North Korean leader Kim Jong-un in 2018, and pursue a bilateral accord to establish a systematic foundation for peaceful coexistence.

The shift in policy priorities is visible in the paper’s language. References to “peace” and “peaceful coexistence” surged to 196 from 29 and mentions of “meeting” or “dialogue” rose to 58 from 16.

By contrast, the section on North Korean human rights has been significantly scaled back. The term “North Korea’s human rights” dropped to 26 from 156, and “freedom” fell to three from 43. Mentions of “North Korean defectors” plummeted to just 10 from 203.

In a foreword message for the paper, Unification Minister Chung Dong-young stated, “Peace on the Korean Peninsula is not a choice for us, but a lifeline.”

“As we practice peace through actions rather than words, I hope that the South and the North can sit down together once again as neighbors peacefully coexisting with each other,” he added.

Despite Seoul’s olive branch, inter-Korean relations remain virtually frozen. There has been no inter-Korean human exchange in five years and no economic exchange whatsoever, the paper showed.

Pyongyang, meanwhile, has doubled down on its two-state policy, revising its constitution to remove all references to unification and cutting off remaining ties with Seoul.

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WASHINGTON — If the U.S. and Iran aren’t able to soon come to a deal to end the war or extend the ceasefire that expires next week, the Trump administration is setting the stage to shift its war campaign toward a more economic-focused effort aimed at choking Tehran into submission rather than relying on bombs alone.

Treasury Secretary Scott Bessent told reporters at a White House briefing Wednesday that the U.S. plans to ramp up economic pain on Iran, and said the new moves will be the “financial equivalent” of a bombing campaign.

The threat of secondary economic sanctions on countries doing business with people, firms, and ships under Iranian control — including allies like the United Arab Emirates and competitors like China — represents an escalation of sanctions that the U.S. is already employing.

Bessent said the administration has “told companies, we have told countries that if you are buying Iranian oil, that if Iranian money is sitting in your banks, we are now willing to apply secondary sanctions, which is a very stern measure. And the Iranians should know that this is going to be the financial equivalent of what we saw in the kinetic activities.”

Treasury Department warns China, Hong Kong, the UAE and Oman

The warning comes the day after the Treasury Department sent a letter to financial institutions in China, Hong Kong, the UAE, and Oman, threatening to levy secondary sanctions for doing business with Iran, and accusing those countries of allowing Iranian illicit activities to flow through their financial institutions.

It’s part of an economic playbook that President Trump still can use to pressure Iran to accept U.S. proposals to limit its nuclear ambitions, a person familiar with the administration’s thinking told the Associated Press. The person spoke on the condition of anonymity because they were not authorized to discuss private discussions on the record.

Privately, the argument being made to Trump is that the Iranians think they can weather the storm — but if they cannot pay their loyalists, that could pressure Iran to the table.

And some in the administration believe there are still more economic targets that can be hit that would put the economic hurt on Iran, including bonyads, the charitable trusts that account for a significant percentage of the Iranian economy.

Bessent told reporters that two Chinese banks have received warnings about handling Iranian money. Trump is preparing to visit Beijing next month for talks with Chinese President Xi Jinping.

Bessent also said that Iran’s Gulf neighbors are now willing to look at freezing Iranian money in their banks because of Iran’s aggression during the war.

Daniel Pickard, a sanctions attorney, said imposing secondary sanctions could result in “diplomatic and economic blowback” from allies that could hurt efforts to build coalitions against Tehran.

“A lot of our trading partners have been outspoken in regard to their opposition to the conflict in Iran,” Pickard said. “Most economic sanctions professionals would agree that when you get more people on the team, the chances of your economic sanctions being effective are greater.”

On Wednesday, the U.S. imposed sanctions on an oil smuggling network connected to the deceased senior Iranian security official Ali Shamkhani, who was a close advisor to the former Supreme Leader of Iran. Sanctions include dozens of individuals, companies, and vessels involved in secretly transporting and selling Iranian and Russian oil through front companies, many of which are in the UAE.

“Treasury will continue to cut off Iran’s illicit smuggling and terror proxy networks,” Bessent said in a statement. “Financial institutions should be on notice that Treasury will leverage all tools and authorities, including secondary sanctions, against those that continue to support Tehran’s terrorist activities.

The administration believes the momentum has shifted

Trump administration officials have also signaled growing confidence that the ceasefire and a blockade of shipments from Iranian ports in the Strait of Hormuz have shifted momentum in Trump’s favor.

Iran has endured tens of billions of dollars in damage during the bombardment to the country’s infrastructure — including setbacks to its oil industry, the heart of its fragile and long-isolated economy — that could take years to repair.

Vice President JD Vance on Tuesday said Trump “doesn’t want to make, like, a small deal. He wants to make the grand bargain.”

“That’s the trade that he’s offering,” Vance said. “If you guys commit to not having a nuclear weapon, we are going to make Iran thrive.”

The president’s deputy chief of staff, Stephen Miller, offered a more caustic assessment of the moment, suggesting that Trump had “played the checkmate move” on Iran by implementing the blockage in the strait.

“If Iran chooses the path of a deal that’s great for the world, that’s great for everybody. If Iran chooses the path of economic strangulation by blockade, then the world will pass Iran by,” Miller said in a Fox News appearance Tuesday evening. “New energy routes will be established. New supply chains will be established. Other nations throughout the region — throughout the world, and especially America — will power the world and Iran will become a footnote.”

Some Republicans are skeptical that more sanctions will work

Some Republicans believe that any tactic to exert more pressure on Tehran is worth trying.

“I would support anything,” said Sen. Thom Tillis (R-N.C.). “If the administration came up with the ideas, I would support all of the above. More pressure, the better.”

Others were skeptical, noting that Tehran was already facing a litany of economic penalties that had little impact on its behavior.

“I’m not sure if it’s sanctions that’ll do it. I think we’re putting some pretty heavy sanctions on right now,” said Sen. Mike Rounds (R-S.D.), a member of the Banking and Armed Services Committees. “I personally am just not optimistic that we actually can fix this thing without a regime change.”

Trita Parsi, executive vice president of the Quincy Institute, a think tank that has been critical of Trump’s decision to launch the war, says that Trump had been “politically cornered and strategically constrained” before he announced the ceasefire. But now, Parsi argues, Trump may have altered the difficult dynamic and created a situation where “Iran now appears to need an agreement more than the United States does.”

“The window now open offers Tehran a chance to convert battlefield leverage into lasting strategic gain,” Parsi wrote in a new analysis. “To let it close would mean forfeiting not just incremental progress, but the possibility of reshaping its economic and geopolitical position. By contrast, the United States, having already secured a tenuous exit ramp through the ceasefire, has less at stake in the short term.”

Hussein, Madhani, Weissert and Kim write for the Associated Press.