(June 18): When North and South Korea opened their first liaison office less than two years ago, President Moon Jae-in in Seoul declared a “new era has dawned.” This week, Kim Jong Un showed him how little had changed when he reduced the US$15 million (S$20.9 million) building to rubble.

See: North Korea blows up South Korea liaison office, Seoul says

The shocking act of destruction, which a Moon spokesman denounced as “reckless,” appeared to be part of a calculated gamble to try to force the South Korean president to break with the US and support sanctions relief for North Korea. The result was to literally blow up the most concrete achievement of Moon’s decades-long drive to establish a lasting peace with his country’s greatest foe.

Kim wasn’t finished. On Wednesday, the North Korean military announced plans to reoccupy sensitive border areas, undermining a historic flurry of agreements in 2018 that fueled talk of a Nobel Peace Prize. A North Korea official dismissed the deals as “scrap paper,” describing Moon as the “chief culprit” for their failure. The regime promised more provocations in the future.

North Korean state media on Wednesday released footage of the inter-Korean liaison office being demolished, further escalating tensions between the two Koreas. More @businesshttps://t.co/tZWwzIbaW6 #남북관계 #연락사무소 pic.twitter.com/smZDIlnPxH

— Bloomberg QuickTake (@QuickTake) June 17, 2020

While North Korea has a long history of diplomatic reversals, few have been as extreme as Kim’s union and breakup with Moon. The relationship’s collapse brings back the specter of military conflict on the Korean Peninsula and leaves the South Korean president just two more years in office to put the Cold War rivals back on a path toward peace.

The dispute underscores a fundamental dilemma facing all South Korean leaders: how to reconcile their policies toward Pyongyang with the geopolitical interests of their allies in Washington. Despite his own trade and security frictions with President Donald Trump, Moon has so far chosen to preserve the alliance with the U.S. at the expense of his ties with Kim.

“He does not want to get in trouble with the United States and he does not want to get in trouble with North Korea,” Andrei Lankov, a professor at Kookmin University who is a specialist on North Korea, told Bloomberg Television. “But trouble with the United States is a far greater problem for him.”

The political cost for Moon, 67, was unclear. Global praise for South Korea’s coronavirus response helped propel Moon’s left-leaning Democratic Party to a historic majority in parliamentary elections in April and lift his approval rating to a record high. Some 62% approved of his performance before the latest North Korea crisis began, according to a Gallup tracking poll.

Some opposition members argue that Moon’s accommodation efforts with North Korea backfired. Hong Moon-pyo, a senior lawmaker with the conservative United Future Party, urged Moon to overhaul his North Korea policy, saying it had led to provocations such as the regime’s tests of new missiles designed to strike all of South Korea.South Korea’s top nuclear envoy, Lee Do-hoon, arrived in Washington Wednesday for talks with U.S. officials about North Korea’s latest provocations, Yonhap News Agency reported.

“Seoul appeared weak, and gave Pyongyang a waiver,” Hong said. “The response was simply just not strong enough.”

Moon, the son of North Korean refugees who settled in South Korea during the 1950-53 Korean War, had spent much of his career working toward peace on the peninsula. He was among a group of acolytes determined to preserve late President Kim Dae-jung’s “Sunshine Policy” toward Pyongyang and served as President Roh Moo-hyun’s chief of staff during an inter-Korean summit in 2007.

After sailing into office in 2017 in the wake of conservative President Park Geun-hye’s ouster, Moon pledged to forge a deal that could one day unify the peninsula. It was an optimistic message as Kim carried out an escalating series of missile tests and Trump threatened to unleash “fire and fury” against the Pyongyang.

In less than a year, Moon was shaking hands with Kim and bounding across their heavily fortified border in the first of several summits with the North Korean leader. Moon was hailed as the man who helped pull Trump and Kim back from the brink of a conflict that could devastate Seoul and draw the U.S. and China into war.

Things began to unravel early in 2019 after Trump walked out of a summit with Kim in Hanoi, rejecting his offer to give up the aging Yongbyon nuclear facility in exchange for sanctions relief. It was a framework that Moon had endorsed after meeting Kim in Pyongyang. Weeks after the Hanoi debacle, Kim dismissed Moon as an “officious mediator.”

After that, Moon saw his overtures to Kim repeatedly rejected as the South Korean military tracked a resurgence in weapons tests north of the border. More recently, North Korea started threatening to roll back Moon’s signature achievements including building the liaison office, removing front-line guard posts and enforcing a ban on military exercises near the border.

‘Tactless, Sinister’

Worse, Kim’s top aides are ruling out future meetings with Moon. Kim Yo Jong -- Kim’s sister and new point person for South Korean affairs -- rejected Moon’s offer to send special envoys to North Korea as a “tactless and sinister proposal.”

Moon doesn’t have much he can offer without risking a blowup with the Trump administration, which has rejected South Korea’s calls for sanctions relief. The U.S. has refused to relax United Nations penalties and other measures against the regime without greater commitments on arms reduction.

Trade between the two Koreas has dropped to virtually zero from US$2.7 billion in 2015, or about 10% of North Korea’s economy. North Korea took a further hit this year when it sealed off its borders in January at the start of the Covid-19 pandemic, crimping his remaining trade with countries like China.

If Trump doesn’t win re-election in November, things could get even more difficult for Moon. Few other U.S. politicians have been so enthusiastic about meeting Kim, whose aides have spoken of a “mysteriously wonderful” chemistry between the two leaders.

There might not be much more for Moon to do, Lankov said, except “sit tight, smile broadly and try to play out the crisis.”