Washington’s Commerce Secretary Wilbur Ross said an order for Chinese banks to stop doing business with Pyongyang was a “logical next step in the sanctions, and a very important one”.
Mr Ross said: ”Chinese commercial banks had been a big route for facilitation of trade to North Korea so the fact that the People’s Bank of China has put out a taboo, that’s a very big deal.”
Bosses at the People’s Bank of China (PBOC) – the essentially the country’s central bank – sent out a directive last instructing domestic banks to implement United Nations sanctions against North Korea.
The Trump administration has announced another round of economic sanctions against Pyongyang, blacklisting eight North Korean banks and 26 individuals the US Treasury Department said were operating in China, Russia, Libya and the United Arab Emirates.
The administration said the North Korean banks are used to help finance development of weapons of mass destruction, including nuclear bombs and the individuals were working with the North Korean financial system.
Treasury Secretary Steven Mnuchin said: “We are targeting North Korean banks and financial facilitators acting as representatives for North Korean banks across the globe.
“This further advances our strategy to fully isolate North Korea in order to achieve our broader objectives of a peaceful and denuclearised Korean peninsula.”
The sanctions complement two other packages of penalties approved unanimously by the 15-member United Nations Security Council this summer, as well as earlier US sanctions.
The UN sanctions target North Korean exports of seafood, textiles and coal, and limit its imports of oil.
China remains reluctant to cut the impoverished country’s oil supplies for fear of toppling the government and triggering a refugee crisis that could spill across its borders.
The United States believes tightening the economic screws is key to forcing Kim’s government to the negotiating table, much as international sanctions helped bring Iran to talks that produced a nuclear disarmament accord in 2015
The sanctions come as Mr Trump and North Korean despot Kim Jong-un traded insults and officials in Pyongyang accused the US of declaring war.