At the end of his four-day visit to the United Nations, President Donald Trump announced an expansion of US sanctions on North Korea.
He signed a new executive order designed to cut off sources of revenue that fund North Korea's efforts to develop nuclear weapons.
"Foreign banks will face a clear choice: do business with the United States or facilitate trade with the lawless regime in North Korea - and they won't have so much trade. This new order provides us with powerful new tools, but I want to be clear, this order targets only one country and that country is North Korea."
Mr Trump said China's Central Bank had instructed other Chinese banks to stop doing business with North Korea's government.
He's thanked China's President Xi Jinping for what he called a "bold" and "unexpected move".
"I am very proud to tell you that, as you may have just heard moments ago, China - their central bank - has told their other banks -- that's a massive banking system -- to immediately stop doing business with North Korea."
China is yet to confirm the policy.
US Treasury Secretary Steven Mnuchin says his department has been authorised to target firms and financial institutions conducting business with North Korea.
"Foreign financial institutions are now on notice that, going forward, they can choose to do business with the United States or with North Korea - but not both. This new executive order enables Treasury to freeze assets of anyone conducting significant trade in goods, services or technology with North Korea."
Australia's Foreign Minister Julie Bishop says she supports the tougher sanctions.
"I certainly welcome this announcement. Australia is of the view that we must put maximum economic pressure on North Korea to ensure that it is compelled to return to the negotiating table."
In a rare speech on camera, President Kim Jong-un has reportedly called Donald Trump's UN speech "a declaration of war" and branded the US president "mentally deranged".
