North Korea’s Nuclear Program Reaches Tipping Point for the US

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2:08This is believed to be North Korea's seventh ballistic missile test of the year and potentially... North Korean leader Kim Jong-un personally oversaw the latest missile launches on April 19th. State media reported that Kim expressed great satisfaction over the test firing.

2:28You have Kim Jong-un watching missiles flying off. His daughter was there as well at one hand. And they show in state media the precision with which the missiles hit this island. John Herskovitz is a Bloomberg editor based in Tokyo. He's been covering North Korea for more than 20 years. John says the purpose of these missile tests is twofold. First, they're a demonstration for a key overseas buyer. North Korea has been supplying these missiles to Russia, and the tests have varied to show the various ways that the missiles can be used. And then there's also the message North Korea is trying to send to the U.S.

3:09at a time when American military resources are stretched by conflicts elsewhere. You have the message to the outside world that North Korea's missiles are abundant, deadly, and can do far more than imagined. And they're looking at the U.S. and saying, you have your defense systems. We know what they are, and we're rolling out these systems trying to defeat them. This is The Big Tick Asia from Bloomberg News. I'm Won Ha. Every week, we take you inside some of the world's biggest and most powerful economies, and the markets, tycoons, and businesses that drive this ever-shifting region. Today on the show, how North Korea's buildup of nuclear missiles has reached a dangerous tipping point for the U.S.

4:03Now, John, most of us, of course, are not weapons investigators. When we talk about a country's nuclear capability or nuclear arsenal, what are we actually counting? What are we talking about? It's a lot of different things. The first thing is fissile material. This is like stuff for bombs. And it's usually plutonium or highly enriched uranium. The other thing is warheads, the actual bombs. They're small enough to go onto missiles if they need to be delivered by bombers. They're even small enough to go into artillery shells. And then we have the delivery systems. These are the ballistic missiles, the bombers, the things that would actually be capable of taking a nuclear bomb and sending it to the enemy.

4:51So for North Korea, they have lots of places to produce fissile material. They are making warheads. And then the delivery systems, which are the ballistic missiles from the short range for South Korea, maybe Japan, all the way to ICBMs, an intercontinental ballistic missile, which are designed to hit the U .S. For years, North Korea has sat at the bottom of the global nuclear hierarchy. In 2018, after meeting Kim Jong-un, President Donald Trump declared in a tweet that North Korea is no longer a nuclear threat. Now, almost a decade later, North Korea still has the smallest arsenal among the nine countries that have nuclear arms capabilities.

5:38But John says that picture may be changing in critical ways. It's on a trajectory to have a significant number of ICBMs and warheads, which will just keep on growing. Getting on parity with the U.S., Russia, and to a lesser extent, China. It's not in the picture, but being along the lines of Britain, France, India and Pakistan is something that's realistic if the trajectory continues over the next five to 10 years. What do we know about how North Korea's nuclear program has evolved? How extensive is the nuclear arsenal now compared to more recent times, you know, Trump's first administration? When Trump left office after his first term, North Korea showed that it could fire off an ICBM and that it had the ability to build warheads.

6:36Whether North Korea could affix a warhead on top of an ICBM that could reach the U.S. and deliver a strike, that was questionable. It was at a stage where it could produce about six bombs worth of nuclear material a year, according to estimates from nuclear experts. If we look at where it is now, North Korea has built out its ICBM arsenal, it's modernized its missiles, it's built up new launcher systems, and it has increased its ability of producing fissile material to maybe 12 to 15 a year. The president of South Korea has said earlier this year it's about 20 bombs worth of material a year. John, North Korea is one of the most isolated countries in the world.

7:34How has it that it's been able to make such progress on nuclear weapons in such a short amount of time? Kim Jong-un has prioritized rocket munitions as a key component of his government. In being so heavily sanctioned, Kim Jong-un has realized the more he can do at home, the better the system becomes. They've moved as much of the production as they can to within its borders. He has devoted a lot of energy into building up missile production, to building launchers. North Korea is also more information savvy under Kim Jong-un than it was under the previous leaders. Lots of these technologies are old technologies, which are available, ready for copying.

8:26The North Korean short-range ballistic missile, which was involved in the recent test, is very similar to a Russian missile. Making short-range ballistic missiles is something that a lot of countries have done. North Korea has studied it. This is a priority for Kim. and you can see the way that the production has gone. They're rolling out more and more of these short-range ballistic missiles. During the Cold War, during the Korean War, the Soviet Union used to supply arms to North Korea. Now North Korea is supplying arms to Russia. Things have changed. As of last year, North Korea was estimated to have 50 warheads and enough fissile material for 90 bombs altogether.

9:14That's according to the Stockholm International Peace Research Institute. John, how do experts arrive at those estimates? And how confident are we in those numbers? The warhead figure, we don't know for sure. It's not out in the open. The fissile material, we have a pretty good idea. So if you just, like, go into Google Earth and type in Yongbyong 5 megawatt reactor, you can see it. This is its main nuclear facility. The IAE has been to the site. U.S. scientists have been to the site. So they know what this can do. And it's an old design. So it's well known what the capacity is for this. In uranium enrichment sites, North Korea in the past year or so released photos from inside these facilities.

10:03It showed the centrifuges, which do the enrichment. Very detailed. They wanted to show the world this is what we have. Nuclear scientists who are really good at looking at this wonkish stuff, counting the centrifuges and how they're arranged, can figure out how much uranium per year can be enriched at these sites. And North Korea is making more and more of this bomb-grade material for its weapons. That's growing, and we can see this. John says that steady growth has pushed North Korea's nuclear program toward a critical tipping point. It's no longer just about estimates and stockpiles. Now, North Korea's ongoing production has experts asking whether U.S.

10:54missile defenses could fend off an attack. North Korea is getting to a stage where it can produce more ICBMs than the U.S. has interceptors to take them down. The U.S. has a certain number of ground-based interceptors in Alaska and also, I believe, in California that are designed to hit ICBMs. ICBMs fly like 1 ,000, 1 ,300 kilometers above the Earth, like three or four times the height of the International Space Station. And they go really fast. Getting interceptors up there that can hit them is tough. It's expensive as well. So the U.S. has about 44 of these interceptors, and they take about two interceptors for each ICBM.

11:46We spoke to one expert who said North Korea is probably at about 24 ICBMs now and building them out. So you're at a stage where you could theoretically overwhelm the defense systems and it increases the chances of delivering a strike on the U.S. Wow. So that's a really dangerous math game. It is a dangerous math game. And it's like there are other interceptor systems out there, but you have to be in the right place at the right time. It's just not a lot of time. If you fire off an ICBM from North Korea, you're looking like 25 to 35 minutes from launch to impact in the U.S. We obviously don't want to be alarmist, but it is a bit scary, though, to think about.

12:32Could North Korea, with all of these ICBMs and nuclear missile now, could they launch a nuclear strike that the U.S. could not stop? The U.S. has expressed confidence that it can deter and intercept a North Korean nuclear attack. But there's a chance now, and with each passing year, the chance of that happening becomes higher and higher. The more North Korea can produce ICBMs, warheads, and bomb-grade material to put in them, the greater the risk for the U.S. By the same token, if North Korea were to strike the U.S., this would be suicidal. It would be the end of Kim Jong-un's regime. It would invite an absolutely massive retaliatory strike that would damage North Korea from top to bottom in ways from which would take years and decades to recover.

13:29And John says it's still not clear if North Korea's weapons could conduct an actual long-range attack on the U.S. They've detonated nuclear devices. They've done mock nuclear strikes with the short-range ballistic missiles. The things that we don't know is if North Korea has re-entry capability for its warheads, heat shields, because you're re-entering the atmosphere like we saw the Artemis II mission. You're doing that sort of thing. It gets really hot. So we don't know if North Korea has the reentry capability for its warheads. But this is a 1950s, 1960s technology. I spoke to one nuclear expert who said that if a country has the ability to build an ICBM, they probably have the ability to have a reentry vehicle.

14:22After the break, how North Korea's aggressive nuclear bet has changed its relations with all of its neighbors and made it a more successful economy than it's ever been.

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17:49President Trump's relationship with Kim Jong-un has swung back and forth over the years. From calling Kim rocket man. Rocket man should have been handled a long time ago. To famously saying that he and Kim fell in love in 2018. And we'll go back and forth and then we fell in love. Okay. No, really. He wrote me beautiful letters and they're great letters. We fell in love. After a series of high profile meetings during Trump's first term, talks between Washington and Pyongyang ultimately collapsed without a deal to scale back North Korea's nuclear program. Since then, direct contact between Trump and Kim has largely dried up.

18:32There's been speculation about whether that could change, especially with Trump expected to travel to China next month. But Bloomberg's John Herskovitz says that even if the two leaders do meet again, the balance of power has shifted. North Korea still shows some respect to Trump, but they've also demanded that the U.S. accept it as a nuclear power, treat it as such, saying that it can't go forward with any negotiations unless it gets an equal billing at the table. So the deference to Trump is still there, but the reliance on Trump just isn't as great as it once was. It's getting help from Russia.

19:10It still has China as an ally and friend. and it's found more ways to get money. It has cyber crimes. It's arsenal that's moving to Russia. That's a way of getting more aid and support from Putin. I mean, how has that picture changed? You mentioned with Russia and the war in Ukraine. North Korea has some of the largest stores of artillery shells in the world because of its standoff with South Korea. And North Korea had millions of artillery shells and artillery rockets that it sent to Russia On top of this, parts for Soviet-era tanks, North Korea has. They have like really old clunkers. No one else has this amount of stuff that Russia needed for Ukraine.

19:56And they have an avenue to get it there. And in return for that flow of weapons, John says Russia has been sending back something just as critical for North Korea. Money. Now, we've gotten some estimates about the value of the aid that North Korea has received from Russia, maybe like 16 to 20 billion dollars. North Korea's economy is about 25 billion a year. Whether it's 16 or 20, whatever it is, it's the largest influx of aid that has happened during Kim Jong-un's reign. It's solidified his ability to rule the country, and it's brought a stability, which means that we're going to see, likely see several more years of Kim having very solid control over the country.

20:46Prices have been stabilized, goods are moving into the country, and you can see it in some of the stuff that North Korea is doing. North Korea has gone on a splurge of building housing and factories across the country. It's getting materials which were once banned under sanctions, and they seem to be appearing in the country now, helping them do a building boom. So the fact that North Korea gets assistance now from Russia in exchange for military weaponry that Russia needs, that totally cuts out the need for U.S. assistance or U.S. holding out the carrot of will-lift sanctions if you give up your nuclear program.

21:32What does that mean then for U.S. leverage in this new world? There just isn't much leverage that the U.S. has. The leverage is that we can offer more economic incentives, but it's difficult for Kim to accept them. Part of the system in North Korea is that there is sacrifice for the collective good. If everything becomes abundant, if the U.S. isn't a threat, then why is the leadership protecting North Korea from the U.S. and a possible invasion? So keeping the U.S. at a bit of a distance works in North Korea's propaganda apparatus. At this point, it has help from Russia. The support from China is there.

22:16It's in one of its strongest positions that it has ever been. John says that shift has Pyongyang operating from a position of unusual confidence. And that matters when global tension and U.S. military resources are stretched elsewhere. North Korea sees its nuclear arsenal as the sword and the shield, protecting the country and being able to inflict heavy blows on its opponents. So the idea of having this arsenal has just been reinforced because of what happened in Iran. For North Korea, John says the fighting involving Iran is being closely studied as a preview of how the U.S. might operate in a real conflict.

23:02So North Korea has seen how the U.S. works strategically, what it will strike first in the event of a war. It'll go after nuclear facilities. It'll go after missile storage sites. It'll go after air defense systems. For North Korea, this has probably been a wake-up call. We have to do better at protecting our missiles. We have to do better at having our air defense systems ready to take on the U.S. So they've seen how the U.S. operates now, and they're probably looking at how to bolster its defenses in case the U.S. strikes first. And there's also what has gone on in Venezuela, what's gone on in Iran.

23:47There's the worry of the so-called decapitation strike, getting the leader. So North Korea has been thinking about this for years, and I'm sure their policy people have been looking at what to do if there is an attack on Kim Jong-un. How do we respond? What systems do we have in place?

24:10That leaves a broader question. How should the world respond now that North Korea's nuclear capabilities appear to have reached a tipping point? You know, there's some people who have argued that instead of removing nuclear weapons from the Korean Peninsula, we should talk about limitation, monitoring, getting a threshold and keeping the state there. Kind of like what the U.S. and Russians did during the Cold War with the various strategic arm limitation treaties and things of that sort. That should be the new way of thinking, setting limits, verification and accepting North Korea as having nuclear weapons and trying to cap what it has.

24:50I think the determination of South Korea and the U.S. and Japan and NATO allies will be to illuminate North Korea's nuclear weapons program entirely. It's just the reality and what people want in theory are different. So maybe we'll see a shift in thinking of the U.S. administration about how it treats North Korea. But at this time, the policy is getting rid of its nuclear arsenal. But perhaps that should be reassessed.

25:26This is The Big Take Asia from Bloomberg News. I'm Wan Ha. To get more from The Big Take and unlimited access to all of Bloomberg.com, subscribe today at Bloomberg.com slash podcast offer. If you like the episode, make sure to subscribe and review The Big Take Asia wherever you listen to podcasts. It really helps people find the show. Thanks for listening. See you next time.

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