Make no mistake: this is a huge step forward in putting pressure on North Korea to halt its rush to develop nuclear weapons and long-range missiles. It will have a near immediate impact on North Korea's ability to pay its bills.

In a major diplomatic victory for the Trump administration, the U.S. has convinced the Chinese government to halt all financial transactions with North Korea.

In a carefully choreographed strategy deployed from the shadow of the United Nations headquarters in New York, Treasury Secretary Steven T. Mnuchin called the head of China's central bank very early Thursday to alert him that Mr. Trump was preparing an executive order to sanction any financial institutions doing business with North Korea. He asked for the cooperation of China, the main source of North Korea's cash. Hours later, the People's Bank of China announced it was directing all other banks in China to halt financial transactions with North Korea. Soon afterward, Mr. Trump signed an executive order in a meeting with the presidents of South Korea and Japan, expanding the Treasury Department's ability to freeze the assets of banks or individuals doing business with Pyongyang. Mr. Trump praised China's action, saying with uncharacteristic understatement that it was "somewhat unexpected." "For much too long, North Korea has been allowed to abuse the international financial system to facilitate funding for its nuclear weapons and missile programs," Mr. Trump said. "Tolerance for this disgraceful practice must end now." Mr. Trump's tightening of the screws culminated his weeklong effort to marshal more international pressure on North Korea. The expanded and coordinated sanctions were announced two days after Mr. Trump alarmed many at the General Assembly by warning that the U.S. was prepared to "totally destroy" North Korea if it attacked the U.S. or its allies. South Korean President Moon Jae-in praised Mr. Trump's handling of the crisis, saying through a translator, "North Korea has continued to make provocations, and this is extremely deplorable and this has angered both me and our people, but the U.S. has responded firmly and in a very good way." White House National Security Adviser H.R. McMaster said Mr. Trump is taking the steps to try to resolve the crisis "short of war." A senior administration official said the White House wants China and North Korea to understand that "this is different than anything in the last quarter century."

Meanwhile, North Korea's foreign minister warned that they could test a hydrogen bomb over the Pacific Ocean as a response to Trump's U.N. speech.

CNN:

North Korea could test a powerful nuclear weapon over the Pacific Ocean in response to US President Donald Trump's threats of military action, the country's foreign minister has warned. Ri Yong Ho spoke to reporters in New York shortly after North Korean leader Kim Jong Un made an unprecedented televised statement, accusing Trump of being "mentally deranged." The forceful rhetoric from Pyongyang came after Trump threatened to"totally destroy" North Korea in a speech to the UN General Assembly on Tuesday. Trump tweeted Friday that Kim was "obviously a madman" who would be "tested like never before." In a rare direct statement delivered straight to camera, Kim said that Trump would "pay dearly" for the threats, and that North Korea "will consider with seriousness exercising of a corresponding, highest level of hard-line countermeasure in history." "I am now thinking hard about what response he could have expected when he allowed such eccentric words to trip off his tongue," Kim said. "I will surely and definitely tame the mentally deranged US dotard with fire." Kim said Trump's comments were reflective of "mentally deranged behavior." Hours later, Kim's foreign minister told reporters in New York that Pyongyang could launch a nuclear missile test in response. "This could probably mean the strongest hydrogen bomb test over the Pacific Ocean. Regarding which measures to take, I don't really know since it is what Kim Jong Un does," said Ri. Japan's defense minister Itsunori Onodera said the country must ready itself for the sudden escalation in tensions and be prepared for a missile launch. "We cannot deny the possibility it may fly over our country," Onodera said Thursday. Japan has been subject to two North Korean missile test flyovers in recent weeks.

Kim's defiance has terrified the Chinese, forcing them to take the most drastic measures yet to avoid war:

Michael C. Desch, director of the International Security Center at Notre Dame University, said China was likely responding to the threat of war as much as any other incentive. "My sense is that it is not sanctions and the U.N. but rather China's fear that the North Korea situation is spiraling out of control that is leading Beijing to take these steps," he said. "The last thing China wants is a war on its border that, at a minimum, could remove a key buffer between it and an American ally and at a maximum could result in a thermonuclear war right next door."

That's really the bottom line. If war is to be avoided in the near future, it will be almost solely up to China. The Chinese hold the whip hand over North Korea. They supply almost all the fuel and food that North Korea needs to stay alive – literally. With no new loans possible, North Korea will have to pay cash for all those necessities – cash it doesn't have.

The situation is likely to come to a head in the near future – perhaps weeks, perhaps a few months. North Korea can't survive for long without the Chinese, which may drive Kim to desperate measures.

Whether it's peace or war, the ball is in Kim's court.