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North Korea is a ‘destabilizing, threatening force,' warns Yale's Stephen Roach who sees Trump Asia trip as potential make or break moment

Yale's Stephen Roach on U.S.-North Korea risks

One of Wall Street's leading authorities on Asia believes President Donald Trump's trip to the region could emerge as a make or break moment.

Stephen Roach, former chairman of Morgan Stanley Asia, lists North Korea's more sophisticated missile program as a top geopolitical risk that could ultimately destabilize the region and trigger a global markets sell-off.

"The North Korea issue is by far the highest priority," Roach said recently on CNBC's "Trading Nation." "Putting pressure on China to aggressively deal with North Korea has got to be very important to President Trump."

The first stop on Trump's trip was in Japan over the weekend and he leaves for South Korea on Tuesday. From there, he goes to China, Vietnam and the Philippines before returning home on Nov. 12. It's the longest trip to Asia by a U.S. president since George H.W. Bush in 1992.

Roach, who lived in Hong Kong for most of 2007 to 2012, sees taking a hard line with China trade as a necessary step to halt North Korea's nuclear ambitions. He said it's important for Trump to strike the right tone with leaders abroad — particularly with Chinese President Xi Jinping.

Roach wants Trump to tell China that North Korea is a "destabilizing, threatening force to you and us. North Korea is still a very weak economy heavily reliant on foreign trade. You, in China, account for 80 to 90 percent of the trade concentrated in food and fuel. We would urge you to put a total embargo on your trade to North Korea, and if you don't, we are prepared to take action against you in the trade arena."

Now a senior fellow at Yale University, Roach said the United States could eventually justify imposing wide-ranging tariffs on China if it doesn't cooperate.

"He [Kim Jong Un] has the capability that his father and grandfather never had and that is nuclear weapons," Roach said. "The threat is many times greater than it was back then, and it could only go one way if it is not addressed sooner rather than later."

Yale University’s Stephen Roach on Trump’s Asia trip, North Korea and more