Trump promised a rapid ramp-up of US Treasury sanctions against the isolated pariah state, after adding its name to a terror blacklist previously led by Iran and Syria.

"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," he said. "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.

In February, Kim's potential rival and elder brother Kim Jong-Nam died after he was sprayed with a nerve agent in Kuala Lumpur airport, in an assassination blamed on Pyongyang.

Tortured in custody

US officials, speaking on condition of anonymity, said that other murders have been linked to North Korea, but the State Department said information about them "remains classified."

"As we take this action today, our thoughts turn to Otto Warmbier and others affected by North Korean oppression," Trump continued, underlining the legal case for the designation.

Warmbier did this year aged only 22 after he was repatriated from detention in North Korea already in a coma. US officials allege he was tortured in custody.

The White House has declared it will not tolerate Kim's regime testing or deploying an intercontinental ballistic missile capable of carrying a nuclear warhead to US cities.

Experts believe Pyongyang is within months of such a threshold, having carried out six nuclear tests since 2006 and test-fired several types of missiles, including multi-stage rockets.

Kim's government insists that, in spite of international sanctions to develop a capability it believes is essential to defending itself from the threat of US and South Korean invasion.

Washington is also pressuring the North's key trade partner and traditional ally China to turn up the sanctions pressure and force Kim to come to the table to discuss his disarmament.

Assassinations on foreign soil

Officials would not say what new sanctions might be announced on Tuesday and in the two weeks to come, but an outside expert said he expected secondary measures against Chinese banks and an Asian diplomat predicted action against individual North Korean traders working in China.

The diplomat said that in the longer term, Washington would like to impose a total oil embargo on the North, but that China is not yet ready to accept a move that could cause Kim's regime to topple, thereby unleashing chaos on its border.

Tillerson said Washington's message to China was: "You control the pipeline that feeds their refinery. You know, you can do that unilaterally if you want to increase that pressure. Whether they're doing that or not, we don't know."

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