SEOUL/WASHINGTON • North Korea yesterday pulled out of a liaison office with the South, in a major setback for Seoul, just hours after the United States imposed the first new sanctions on the North since the second US-North Korea summit broke down last month.

North Korea said it was quitting the joint liaison office set up in September in the border city of Kaesong after a historic summit between leader Kim Jong Un and South Korea's President Moon Jae-in early last year.

"The North's side pulled out after conveying to us that they are doing so on the instructions from a higher level, during a liaison officials' contact this morning," South Korea's Vice-Unification Minister Chun Hae-sung told a briefing.

South Korea regrets the decision and urged a swift normalisation of the arrangement, Mr Chun said.

The move came after the US on Thursday blacklisted two Chinese shipping companies it said helped North Korea evade sanctions over its nuclear programme, and cited 67 vessels it said engaged in illicit trade helping the North.

It was the first such step since a second meeting between US President Donald Trump and North Korean leader Kim in Hanoi broke down over conflicting demands by the North for relief from sanctions and from the US for Pyongyang to give up its nuclear weapons.

The South's Mr Chun said he would not directly link the North's move to the failed Hanoi summit.

But experts saw a pattern in the North lashing out against the South when its crucial strategic position with Washington is in jeopardy.

"The North sees its nuclear issue and ties with the United States as a matter of greater strategic importance, so when they try to assert its position, they sacrifice the ties with the South, which is considered inferior," said Mr Shin Beom-chul of the Asan Institute for Policy Studies in Seoul.

REUTERS