The US designation of North Korea as a state sponsor of terror has raised fears that Pyongyang could resume its weapons tests as a way to lash out at the latest effort to isolate the regime.
United States President Donald Trump announced the designation on Monday, which allows the US to impose more sanctions on North Korea over its nuclear weapons and missile programmes. Additional sanctions further raise the risks for companies still doing trade with Pyongyang.
China yesterday called for extra efforts to resolve the crisis through talks, while South Korea and Japan welcomed the US move to reinstate the North on a list of state sponsors of terrorism. Iran, Sudan and Syria are also on the list.
Mr Trump and Russian President Vladimir Putin were due to discuss North Korea in a telephone conversation yesterday.
Japanese Defence Minister Itsunori Onodera yesterday lauded the US move. He said the regime of North Korean leader Kim Jong Un would likely react "strongly".
"We cannot deny that the North will resort to new provocative actions," Mr Onodera said. "It is important to be increasingly vigilant."
North Korea was previously designated as a state sponsor of terror by then President George H.W. Bush in 1988. His son, President George W. Bush, removed it from the list in 2008.
Analysts also expect a strong response from Pyongyang.
"All the uninformed North Korea pundits of the world will say the re-listing is all symbolic. Not so," Dr Lee Sung Yoon, professor of Korean studies at the Fletcher School of Law and Diplomacy, told The Straits Times in an e-mail.
"Trump's announcement during the week of Thanksgiving holiday gives North Korea the excuse to conduct weapons tests and deflect blame to the US," he said, adding: "Pyongyang will likely call this the latest 'declaration of war' and escalate (the issue) before the year is through, even as early as this week."
Sanction hawks say the decision was overdue, and does not necessarily come at the cost of diplomatic efforts to find a way out of the stand-off.
The message to the North's Mr Kim was that "this is only going to get worse until you are ready to come and talk", US Secretary of State Rex Tillerson told reporters on Monday.
With the relisting, the world will think twice before engaging in business transactions with North Korea, not out of fear of symbolic opprobrium, but real-life financial costs, Dr Lee wrote.
It opens banks to retaliatory action from the US Treasury Department if they process US dollar transactions on behalf of any North Korean entity. In 2015, BNP Paribas was fined US$8.9 billion (S$12.1 billion) for violating sanctions against Sudan, Cuba and Iran from 2004 to 2012. Few banks will want to flirt with that risk over North Korea.
States that continue to import small arms and military equipment from North Korea will be ineligible to receive US foreign aid.
Mr Joshua Stanton, a Washington-based attorney and expert on sanctions on North Korea, tweeted: "It is unfortunate that some of (President Donald) Trump's policies and how he communicates cloud our judgment when he makes the right call. Today, he made the right call."
Mr Anthony Ruggiero, senior fellow at the Foundation for Defence of Democracies, said there was no reason to delay the decision, tweeting that "the only surprise is it took this long to relist North Korea".
