South Korea is threatening that North Korea will pay a price for an apparent torpedo attack against one of its warships.
On Monday, the South cut off trade with its neighbor to the North, and now, the United States is in the middle of the fray.
South Korean President Lee Myung-bak looked grim as he announced the trade cut-off.
Lee said his country has tolerated North Korea's brutality time and again, but now it will pay a price and will be held accountable, starting in the U.N. Security Council.
South Korea has also banned North Korean ships from moving in waters it controls.
Forty-six sailors died when a torpedo sank a South Korean warship in March. It was the country's worst military disaster since the Korean War in 1953.
An international investigation found that North Korea was responsible.
The White House says it supports Lee's call for North Korea to apologize and punish those responsible.
President Obama has also ordered the U.S. Military to cooperate with South Korea's forces to deter future aggression.
Nearly 30,000 American troops are stationed there. The two countries have scheduled more war exercises, concentrating on patrolling the seas.
Secretary of State Hillary Clinton, who is in Beijing, called the situation "highly precarious."
"We ask North Korea to stop its provocative behavior, halt its policy of threats and belligerence toward its neighbors and take irreversible steps steps to fulfill its de-nuclearization commitments and comply with international law," Clinton said.
But North Korea isn't likely to listen to Mrs. Clinton unless she can persuade the Chinese to pressure Pyongyang.
With its million-man army and its advancing nuclear program, the regime of North Korean dictator Kim Jong Il hasn't shown that it's intimidated by Western threats.