Who won the US-North Korea summit, Kim or Trump

IHS Markit’s John Raines talks to IGTV’s Victoria Scholar about what we learned from the US-NK Singapore summit and highlights what’s next in terms of denuclearisation of the Korean peninsula. 

What have we learnt from US-NK Singapore summit?

US President Donald Trump met with North Korean leader Kim Jong Un at a summit on the island of Sentosa in Singapore. The unprecedented meeting culminated in the signing of a joint statement by both leaders and a handshake symbolising a key step towards easing diplomatic tensions. The statement said, ‘President Trump committed to provide security guarantees to the DPRK, and Chairman Kim Jong-un reaffirmed his firm and unwavering commitment to complete denuclearisation of the Korean Peninsula.’

The goal of the United States is to achieve complete, verifiable and irreversible denuclearization (CVID). Some critics argued that the omission of the words ‘verifiable’ and ‘irreversible’ meant that the agreement was light on detail and enforceability. John Raines, head of political risk, economics and country risk at IHS Markit said the deal was positive in terms of international war risks but it is a ‘symbolic’ deal which is ‘a little bit light’ on specifics. 

US ending war games 

As part of the deal, the US agreed to end its joint military exercises with South Korea referred to as war games in a win for North Korea. Trump said the war games are ‘tremendously expensive.

The amount of money we spend on that is incredible.’  According to Raines this is a significant concession and sends a message to North Korea that the US is willing to meet half way on security guarantees. 

North Korea’s closure of a missile test site 

Trump said that North Korea is ‘destroying a major missile engine testing site,’ which would represent a win for America. However, the site was unnamed, drawing criticism from some experts. 

Raines said that he has not seen ‘intelligence to suggest that they have completely disarmed this facility.’

War risks 

Not long ago, the world was seriously concerned about the potential threat of nuclear warfare. Sentiment has clearly shifted with Trump describing the North Korean leader Kim Jong Un as a ‘talented man’ and hailing the ‘special bond’ between the two nations. 

Raines says that the dialogue has helped to diminish war risks. However, in the long term war risks could increase again if diplomacy fails. 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.