The North Korean Central News Agency (KCNA) published a bitter statement this morning, denouncing the joint US-South Korean “Max Thunder” air force exercise that began on May 11 as an “undisguised challenge” to the peace talks held last month and a “rude and wicked provocation.”

The KCNA specifically referred to “commentary” that has described the “Max Thunder” war games as part of the US policy of “maximum pressure and sanctions.” The Trump administration has continued to insist that the US will not end its military threats or economic embargo until North Korea agrees to the “complete” and “verifiable” dismantling of a small arsenal of nuclear weapons.

In retaliation, the KCNA announced that Pyongyang was “suspending” top-level talks with South Korean officials scheduled for today. It warned that Washington “will have to carefully contemplate” the fate of the planned June 12 summit between its leader Kim Jong-un and US President Donald Trump. Pyongyang would “closely watch the ensuing behaviour of the US and the South Korean authorities.”

North Korea’s reaction to the annual military exercise, which has been long scheduled, appears to have taken both the Trump administration and the South Korean government somewhat by surprise. On May 9, the Pyongyang regime released three American prisoners following talks with US Secretary of State Mike Pompeo. At a joint press conference in Washington on May 10—the day before “Max Thunder” began—Pompeo and South Korean Foreign Minister Kang Kyung-wha both claimed that North Korea had largely agreed to US terms for denuclearisation.

In media interviews last weekend, Pompeo and other administration figures continued to build up expectations that Pyongyang would submit to Washington’s demands. Throughout the US political and media establishment, however, Pompeo’s upbeat assessment was criticised and even ridiculed as “naïve” and “Pollyannaish.” Former North Korean deputy ambassador to Britain, Thae Yong-ho, who defected to South Korea in 2016, was widely cited in the US, South Korean and international press, asserting that North Korea would “never” give up its nuclear weapons.

The Trump administration has, to a great extent, boxed both itself and North Korea into a corner.

To mollify opponents and critics in the American ruling class, Trump has vowed to walk out on planned talks unless Pyongyang agrees, in Pompeo’s words, to “permanent, verifiable, irreversible dismantling of North Korea’s weapons of mass destruction program … without delay.”

At the same time, to appease domestic critics and the US military-intelligence apparatus, as well as Japan and factions of the South Korean establishment, Trump has ruled out any withdrawal of American military forces from South Korea—a condition that North Korea has traditionally linked with its agreement to give up its weapons programs and sign a peace treaty to formally end the 1950–53 Korean War.

North Korea’s announcement makes clear its intention to try to secure better terms for the upcoming negotiations. It is unlikely to be a coincidence that the statement was issued shortly after talks yesterday in China involving top officials of the two regimes. China has vast interests at stake in developments on the Korean Peninsula and is carrying out its own diplomatic offensives to seek to protect them.

Since the Korean War, North Korea has served China as a buffer between its border with the peninsula and the US and allied military forces in the region. Over the past decade, tensions have developed, however, as Pyongyang’s pursuit of its own nuclear weapons has provided Washington with a pretext to massively increase the size and capabilities of US military forces in the region. Japanese imperialism has also exploited Pyongyang’s stance to ramp up its military spending and capacities, and systematically repudiate the post-World War II pacifist constitution that formally prevents it from engaging in offensive wars.

Of primary concern to China is the deployment by the US and Japan of advanced anti-missile systems, including the installation of the American THAAD system in South Korea last year that can spy deep into Chinese territory.

While portrayed as a defensive reaction to the purported threat posed by North Korea, the regional anti-missile shield is part of the US preparations for a potential nuclear “first strike” against China in the event of war. US nuclear strategy is to destroy as many of China’s weapons as possible before they can be launched, and shoot down, with the anti-missile batteries, any that are fired in retaliation.

The 2018 US National Defense Strategy openly labelled China as the US’s greatest “strategic competitor” and declared the Pentagon had to “prioritise preparedness for war” by further expanding its already vast nuclear arsenal.

Beijing has collaborated with the Trump administration in imposing the harshest-ever economic sanctions on North Korea and demanding it end its weapons’ programs. China’s aim, however, is to strip both the US and Japan of one of their pretexts for the military build-up in the region.

In the longer-term, Beijing assesses that the opening up of North Korea to a flood of investment would lead to even greater economic integration between China and South Korea, and strengthen the wing of the South Korean establishment that views its military alliance with the US as unnecessary and even damaging to its interests.

There is little doubt that Beijing is exerting immense pressure on North Korea, including by holding out the possibility of substantial economic assistance, not to make any agreement with Washington that compromises Chinese interests. It would expect Pyongyang to at least insist on the withdrawal of the THAAD system, on Chinese and Russian involvement in any process of “verifying” denuclearisation and on a guarantee that American and South Korean forces will not move north of the existing border.

There also may be major divisions within the North Korean regime, with factions deeply opposed to making any concessions to the US and South Korea.

The Trump administration, faced with its own domestic pressures and provocatively ramping up trade and strategic tensions with China, may call off the talks or walk out on them. The only alternative policy it has proposed to disarm North Korea is to “totally destroy” the country: an implicit threat of a massive military assault, possibly involving nuclear weapons.