The Treasury Department says that the Bank of Dandong is a "primary money-laundering concern", and it is proposing severing the bank from the US financial system, pending a 60-day review period. President Donald Trump has been leaning on China to use its influence as North Korea's main trading partner but has expressed some frustration recently with a lack of progress.
The sanctions are the latest in a series of signs that the USA has begun to take action to pressure China after months of fruitless efforts to persuade Beijing to exercise more of its influence with the North.
"I wish we would have a little more help with respect to North Korea from China, but that doesn't seem to be working out", Trump said last week after tweeting that Chinese efforts to pressure North Korea "has not worked out".
In a move that may be seen as the USA pressuring China to rein in wayward ally North Korea, Treasury Secretary Steve Mnuchin announced Thursday the U.S.is taking action against a Chinese bank he said is helping North Korea evade sanctions.More news: Pakistan, China, Afghanistan agree on seven points
Xi could make a concession to the United States by cracking down on more Chinese companies and banks that do illicit business with North Korea - there are tons to choose from.
Sanctions are also being imposed on Dalian Global Unity Shipping and two Chinese citizens who the Treasury said have business dealings with North Korea related to illicit financial transactions.
The Bank of Dandong will no longer be able to access the USA financial system "either directly or indirectly" and called the action "very significant", Mnuchin said.
Mnuchin said the Bank of Dandong has facilitated millions of dollars of transactions for companies involved in North Korea's weapons of mass destruction and ballistic missile programs.More news: Sheriff: Man killed missing son, 5, after Disneyland trip
He said that "nobody is off limits" when it comes to giving illegal financial assistance to North Korea. It named the two individuals as Sun Wei and Li Hong Ri.
Also blacklisted was Dalian Global Unity Shipping Co.
The move is being seen as part of the Trump administrations effort to prevent North Korea from obtaining nuclear weapons and missiles.
Trump has been pushing for tougher sanctions against Pyongyang to curb its nuclear ambitions and his administration has said military action was a possibility.More news: Centre gives green signal for Greater Noida International Airport
"After six months of a policy review and reinventing the wheel, they've basically arrived at exactly the point the Obama administration left off", said Ely Ratner, a senior fellow in China studies at the Council on Foreign Relations who served as Vice President Joe Biden's deputy national security adviser.