The US President said the designation will impose further penalties on Kim Jong-un’s regime, saying it was a long-overdue step and part of a “maximum pressure campaign” against the North.
North Korea will join Iran, Sudan and Syria on a list of countries that have “repeatedly provided support for acts of international terrorism”. The designation triggers sanctions including restrictions on US foreign assistance and a ban on defence exports and sales.
Mr Trump told reporters on Monday that the decision “should have happened years ago”, and called Pyongyang “a murderous regime”. He added that North Korea “must end its unlawful nuclear and ballistic missile development”, as well as its support for international terrorism.
US officials said the action was partly motivated by the killing of Mr Kim’s estranged half brother in a Malaysian airport this year, which was defined as an act of terrorism.
Secretary of State Rex Tillerson referred to the move as part of the "peaceful pressure" campaign, noting it was in line with Mr Trump's "maximum pressure" programme to get countries like Malaysia, Vietnam, Philippines, Singapore, and South Sudan to cut off Pyongyang financially as well. All countries have agreed to do so in recent weeks.
He said: "we still hope for diplomacy."
Mr Tillerson called the designation as "very symbolic...practical effects may be limited but hopefully clos[es] off loopholes" in existing sanctions for "dual use" product exports that can be used by civilian and military end-users within North Korea.
Those products require separate licenses to sell under US export regulations.
North Korea was last on the state-sponsored terror list in 2008, under the George W Bush administration. It was removed that year in a bid to salvage a deal halting its nuclear development.
Mr Tillerson said that attempt at negotiations "obviously failed."
Syria was added to the list in 1979, with Iran following five years later. Sudan was defined as such in 1993.
The administration debated the decision for months before the announcement, US officials told the Associated Press. State Department officials reportedly disagreed on whether the country met the legal requirements to be deemed a state sponsor of terror.
There must be more than one incident of state-sponsored terrorism for a country to be added to the list. The killing of Mr Kim’s half-brother counted as one incident, but officials were divided over whether the treatment of American student Otto Warmbier constituted terrorism. Mr Warmbier was returned to the US in a coma after 17 months in North Korean custody, and died shortly thereafter.
Mr Tillerson noted that North Korea's fuel supply "is already quite constrained" as shown by "anecdotal evidence" and US intelligence sources which show cars lined up at petrol stations or certain stations closing that would normally have fuel.
The issue there is that the country only has one refinery that operates internally so they are heavily reliant on finished fuel imports, Mr Tillerson explained during a rare press briefing for the camera-shy diplomat.
Those finished fuel products are covered under the United Nations' latest round of strict sanctions though he said China, in control of the main fuel pipeline into the hermit kingdom, can cut off supplies "unilaterally," should they choose to do so.
Tensions have risen between North Korea and the US this year, as Pyongyang progressed rapidly with its nuclear missile and bomb testing. The country tested its most powerful nuclear weapon yet in September, and is said to have developed missiles capable of delivering nuclear warheads to the US mainland.
In August, after Pyongyang threatened to launch missiles into the water around the US territory of Guam, Mr Trump said the country would be “met with fire and fury like the world has never seen”. The remarks sparked concern in the American public, and aggressive comments from the North Korean regime.
American diplomats have attempted to soothe North Korea with dialogue, while also working to cut off funds for the country’s nuclear programme with sanctions. In September, the United Nations passed its most stringent sanctions yet against the country. Nikki Haley, the US ambassador to the UN, vowed to pursue the “strongest possible” sanctions to deter North Korea’s nuclear programme.
“Today, we are saying the world will never accept a nuclear-armed North Korea,” she said. “And today the Security Council is saying if North Korea does not halt its nuclear programme, we will act to stop it ourselves.”
Mr Tillerson said the Treasury Department will be announcing further sanctions as part of the designation soon.
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