“there’s no military solution [to North Korea]." - Steve Bannon

Former strategic adviser to President Trump, Steve Bannon was right, before leaving his job as a strategic adviser to President Donald Trump on Aug. 18, Bannon said in a defiant interview that “there’s no military solution [to North Korea]. 
Until somebody solves the part of the equation that shows me that 10 million people in Seoul don’t die in the first 30 minutes … there’s no military solution here, they got us.”

After North Korea fired a missile over Japan on Aug. 28 — arguably, an act of war —

Trump said in a statement that “all options are on the table.” But all options are not on the table. In fact, there may be only one way forward on the Korean standoff, with investors having no choice but to live with the nerve-wracking risks.

Trump wants North Korean dictator Kim Jong Un to believe the United States is willing to launch a preemptive military strike to halt or destroy North Korea’s nuclear program, which most likely consists of several nuclear devices and missiles that will soon be able to carry those weapons to much of the  United States. It’s prudent for Trump to send that message to Kim since he’d be tying his own hands and limiting his negotiating power by saying otherwise.

But as Bannon said, a military option is implausible, for one obvious reason: The bloodshed would be horrifying. Any shooting war would allow North Korea plenty of time to lob thousands of artillery shells at Seoul before the United States and its allies are able to eliminate the threat. It’s also now possible Kim could launch a nuke at Japan, the U.S. territory of Guam or even the continental United States before American bombs shut him down. The death toll would be so large no commander-in-chief would order such action, and if he or she did, the Pentagon would probably find a way not to carry out the order.

Limitations on containing North Korea

Just about every other approach to reining in the North Korean nuclear program has failed. Diplomacy was the method of choice for much of the past 20 years, and that allowed North Korea to covertly, then openly, develop what is now a legitimate nuclear arsenal. When diplomacy failed, the West imposed economic sanctions, which may have slowed the North’s nuclear program but obviously didn’t stop it.

China has more leverage over North Korea than any other nation, but as Trump is learning, China has reasons to keep Kim in power and use him as a counterweight to America’s presence in South Korea. Trump can still lean harder on China and threaten sanctions there, but China is a huge U.S. trading partner and what hurts China would hurt American interests, too.

Finally, there is covert action, including the possible assassination of Kim. That could include cyber warfare that sabotages North Korean weaponry. But North Korea seems as impervious to covert action as anyplace, and Kim’s personal security is so rigorous that hardly anybody knows where he is at any given moment. So while it’s possible Kim could be assassinated — by internal factions or foreign interests — that possibility seems remote.

That leaves one likely outcome: simply tolerating North Korea as it is and doing whatever is necessary to contain the threat it poses. “Deterrence is the most likely outcome,” says Sue Mi Terry of the consulting firm Bower Group Asia, who was a former senior analyst on North Korea at the CIA. “Trump will never say that, but we are living with a nuclear North Korea, just as we live with a nuclear Russia and a nuclear China. It’s only whether we want to admit that or not.”

This is obviously an unsatisfying outcome that leaves the bellicose Kim free to build his weapons program and broadcast his threats of doom against the United States and its allies. Kim’s provocations clearly irritate Trump, who told journalists on Aug. 8, “North Korea best not make any more threats to the United States. They will be met with fire, fury, and frankly power, the likes of which this world has never seen before.” Trump’s warning seems not to have constrained Kim at all.

But North Korea’s verbal threats aren’t inherently harmful, and answering Kim with counter threats may actually be a form of acknowledgment he craves. The North’s weapons tests are far more dangerous since one could go awry and actually kill people, or trigger a response by a U.S. ally such as Japan that could lead to a military confrontation. The North’s missile firings and nuclear tests also generate a tenser military posture throughout the region, heightening the risk of an inadvertent clash, perhaps at sea, as has happened before.