Trump labels North Korea ‘state sponsor of terrorism'

President Donald Trump has declared North Korea a state sponsor of terrorism, threatening "very large" additional sanctions to places on the secretive Asian state.

It has been nine years since it was removed from the list.

"Should have happened a long time ago. Should have happened years ago," Trump declared, citing the death of a US student who had been held in a North Korean jail and the assassination by nerve agent of Kim's elder brother on foreign soil as reasons for the move.

But, speaking to reporters after the cabinet meeting, Secretary of State Rex Tillerson said Washington has not given up hope that sanctions and diplomacy can pressure Kim into agreeing to sit down and discuss his nuclear disarmament.

Tillerson said that punitive measures were already having a "significant effect" on Pyongyang's economy – even if China has yet to cut off oil supplies to its sole refinery – and said: "We still hope for diplomacy."

‘Maximum pressure campaign’

Both Trump and Kim have previously raised fears of open conflict erupting over the North's banned nuclear missile program, with both insulting and threatening the other with a devastating military response.

But US officials have also been clear that their main hope is that what Tillerson described as an inexorable increase in economic and diplomatic pressure -- backed by China -- will force Pyongyang to back down.

"We know that there are current shortages of fuel based upon what we can gather anecdotally and also from certain intelligence sources," Tillerson said.

"We know that their revenues are down. So I think it is having an effect.

“Is this the reason we haven't had a provocative act in 60 days? I don't want to suggest to you that I can say. We are hopeful this period can continue."

North Korea is already under a crushing package of United States and United Nations sanctions, and Monday's terror designation will not have much immediate economic impact.

But Trump said his declaration would kick off a two-week period of announcements – starting on Tuesday with a "very large" US Treasury sanctions measure – that would eventually amount to a "maximum pressure campaign."

And US officials see the designation – which was removed by then-president George W Bush in 2008 – as a way of ratcheting up pressure on other states and foreign banks that may be failing to fully enforce the sanctions already in place.

"In addition to threatening the world by nuclear devastation, North Korea repeatedly supported acts of international terrorism including assassinations on foreign soil," Trump said.