By Jay Solomon in Washington and Josh Chin in Beijing 

The U.S. Congress is moving swiftly to approve new sanctions on North Korea that would likely entangle Chinese companies as well, adding to growing animosity between Washington and Beijing.

Officials working on the legislation said it would include so-called secondary sanctions--the type used by the Obama administration to inflict serious economic damage on Iran before reaching a landmark nuclear agreement last year.

These penalties would target not just North Korean companies and individuals believed to be involved in the country's nuclear-weapons program and cyberwarfare operations, but anyone doing business with them.

Iran had a wide range of trading partners, but China is by far North Korea's closest. That means the new sanctions could fall heavily on Chinese firms, which current and former U.S. officials have long accused of complicity in Pyongyang's military development.

The White House retains the power to waive sanctions in certain cases, but would be required to report its reasons to Congress.

China on Friday said it opposed any efforts to unilaterally impose sanctions on North Korea. "We hope all relevant parties would meet each other halfway instead of further complicating the issue," said a Foreign Ministry spokesman in Beijing.

Hours later, the White House said President Barack Obama and Chinese President Xi Jinping spoke by phone about how to coordinate efforts in response to North Korea's provocations.

After testing its fourth nuclear weapon on Jan. 6, Pyongyang notified the United Nations this past week that it would launch a satellite this month using rockets that could also be used for delivering ballistic missiles--both in defiance of international prohibitions.

A North Korea-focused website, 38 North, posted satellite photos taken this week apparently showing tanker trucks moving fuel to Pyongyang's launch location in the country's northeast. The website said it didn't appear the fueling had begun. North Korea told the U.N. it planned to test sometime between Feb. 8 and 25. The arrival of tanker trucks has occurred 1-2 weeks before previous rocket launches, the site said.

The congressional sanctions thrust, which appears headed for completion this month, is unlikely to meet with a White House veto. But the move would be sure to further aggravate U.S.-China tensions, which already have been strained by territorial disputes in the South China Sea and other regional security issues.

Sen. Cory Gardner (R., Colo.) who sponsored the North Korea legislation that was approved Jan. 28 by the Senate Foreign Relations Committee, said it aims to "send a strong message to China and others that the United States will use every punitive economic tool at its disposal to punish the regime and its enablers, wherever they may be."

Secretary of State John Kerry traveled to China late last month to press Chinese officials to back tougher sanctions on North Korea. His meetings with his Chinese counterpart Foreign Minister Wang Yi were tense, and they agreed only that the countries should take swifter action at the U.N., according to U.S. officials.

Part of Mr. Kerry's case was that world powers successfully came together to enforce tough sanctions on Iran--both unilaterally and at the U.N.--and that Washington and Beijing needed to take similar joint steps to counter North Korea's provocations.

But Chinese officials resisted Mr. Kerry's plea for tougher sanctions, citing adverse effects to Chinese businesses.

Mr. Kerry warned the Chinese that if they didn't toughen their response to the North the U.S. might have to use secondary sanctions or deploy an advanced U.S. missile defense system to the region, according to U.S. officials.

In their phone call Friday, Mr. Obama and Mr. Xi agreed the planned ballistic missile test would violate United Nations Security Council resolutions and could prompt the adoption of a new one, the White House said.

"Both leaders also conveyed that they will not accept North Korea as a nuclear weapon state," the statement said, and "emphasized the importance of a strong and united international response to North Korea's provocations."

There was no immediate comment on the phone call from Beijing.

Since last month, the U.S. has been negotiating with China for a Security Council resolution that would expand the scope of U.N. sanctions to a broader swath of North Korea's economy and target new individuals involved with North Korea's nuclear program, including intermediaries, the diplomats said.

But China's membership on Security Council gives it veto power over any resolution. The U.S. isn't likely to introduce one without the Chinese approval because that would risk prompting Beijing to exercise its veto and signal a lack of unity over the issue.

The differences have delayed any Security Council action, said diplomats.

Senior administration officials said they were receptive to vigorously enforcing the unilateral sanctions being developed by the Congress, despite some technical concerns.

Congressional officials working on the legislation said they've sought to replicate elements of the financial campaign the Obama administration used against Iran. Those sanctions cut by more than half Tehran's crude oil exports and largely froze Tehran out of the global financial system.

The North Korea legislation aims to sanction any foreign firms aiding Pyongyang's nuclear and cyberwarfare programs. It also is designed to block North Korea's ability to export minerals, a key foreign exchange earner, and blacklist its entire financial system for its alleged role in illicit businesses.

"China is the place we really want to send a signal to," said a congressional official working on the North Korea sanctions.

Some experts on North Korea are skeptical the new penalties will force Pyongyang back to the negotiating table. The country is already economically isolated, they said, and many of the small Chinese firms trading with Pyongyang aren't concerned about losing access to the dollar.

Some former Obama administration officials, however, said they're worried Beijing would retaliate economically against the U.S.--as it has threatened to do. They also said it would be very difficult to pressure Pyongyang economically if the Chinese government isn't on board.

"For any of this to work, you need China to have decided to let itself be leveraged," said Richard Nephew, who worked on sanctions in the Obama White House and State Department. "That's always going to be the rub."

Farnaz Fassihi at the United Nations and Carol E. Lee and Felicia Schwartz contributed to this article.

Write to Jay Solomon at jay.solomon@wsj.com and Josh Chin at josh.chin@wsj.com

(END) Dow Jones Newswires

February 05, 2016 20:22 ET (01:22 GMT)