North Korea has warned it could revive a state policy aimed at strengthening its nuclear arsenal if the United States does not lift economic sanctions against the country. The statement released by the Foreign Ministry on Friday evening came amid a sense of unease between Washington and Seoul over the use of sanctions and pressure to get the North to relinquish its nuclear programme. The ministry said North Korea could bring back its pyongjin policy of simultaneously advancing its nuclear capabilities and economic development if the United States does not change its stance. Could Hong Kong’s ‘one country, two systems’ work for Korea? The North came short of threatening to abandon the ongoing nuclear negotiations with the US. But it accused Washington of derailing commitments made by North Korean leader Kim Jong-un and President Donald Trump at their June summit in Singapore to work toward a nuclear-free Korean peninsula, without describing how and when it would occur. “The US thinks that its oft-repeated ‘sanctions and pressure’ lead to ‘denuclearisation.’ We cannot help laughing at such a foolish idea,” said the statement, released under the name of the director of the ministry’s Institute for American Studies. “The improvement of relations and sanctions are incompatible.” Following a series of provocative nuclear and missile tests last year, Kim shifted to diplomacy when he met Trump between three summits with South Korean President Moon Jae-in, who lobbied hard to revive nuclear diplomacy between Washington and Seoul. However, the North has been playing hardball since the summitry, insisting that sanctions should be lifted before any progress in nuclear talks, which fuelled doubts on whether Kim would ever deal away a nuclear programme he may see as his strongest guarantee of survival. Ahead of his first summit with Moon in April, Kim said the country should shift its focus to economic development as the “pyongjin” policy had achieved a “great victory.” He also declared that the North would stop nuclear and long-range missile tests and close its nuclear testing ground. The North unilaterally dismantled the nuclear testing ground in May, but did not invite experts to observe and verify the event. Friday’s statement marked the first time the North said it could potentially resume weapons tests and other development activities since Kim’s signalled a new state policy in April. “If the US keeps behaving arrogantly without showing any change in its stand, while failing to properly understand our repeated demand, the DPRK may add one thing to the state policy for directing all efforts to the economic construction adopted in April and as a result, the word pyongjin may appear again,” the statement said, referring to North Korea by its official name, the Democratic People’s Republic of Korea. How to break the stalemate on the Korean peninsula as North and South Korea take centre-stage Pyongjin means “dual advancement.” Moon has described inter-Korean engagement as crucial to resolving the nuclear stand-off. A large number of South Korean CEOs accompanied Moon in his September visit to Pyongyang, when he and Kim agreed to normalise operations at a jointly run factory park and resume South Korean visitors’ travel to the North when possible, voicing optimism the international sanctions could end and allow such projects. But South Korea’s enthusiasm for engagement with its rival has also created discomfort in the United States amid growing concerns that the North is dragging its feet with its promise to denuclearise. South Korea last month walked back on a proposal to lift some of its unilateral sanctions against North Korea to create diplomatic space following Trump’s blunt retort that Seoul could “do nothing” without Washington’s approval.