Tensions are rising between the United States, North Korea and China, threatening to create the first significant national security crisis of the Trump presidency. This week, the United States began deploying a missile defense system to South Korea, sparking warnings from Chinese officials who say the U.S. is escalating a regional arms race. The U.S. says the deployment of the Terminal High Altitude Area Defense System, known as THAAD, seeks to protect South Korea amid a series of recent missile tests launched by North Korea.

On Monday, North Korea launched its latest test of four ballistic missiles, three of which reportedly landed less than 200 miles from Japan’s coastline. North Korea says the missiles are seeking to hit U.S. bases in Japan.

The deployment of the U.S. missile system is widely opposed by both South Koreans, who have been protesting against U.S. militarization, and by Chinese officials, who say the missile system actually aims to counter China’s military power in the region, not to contain North Korea.

Chinese officials are calling for both an end to North Korea’s nuclear program and an end to joint U.S. and South Korean military drills. This is the Chinese Foreign Minister Wang Yi.

Wang Yi: “As a first step, North Korea should suspend nuclear activity, and the U.S. and South Korea should also suspend large-scale military drills, and, with both sides stopping, avoid the current security dilemma and make all sides to return to the negotiating table. Later, based on a dual-track strategy, we will realize denuclearization and establish a peace mechanism on the peninsula to simultaneously and equally resolve the concerns of all parties.”

On Tuesday, the U.S. also imposed a $1.19 billion penalty against the Chinese telecommunications company ZTE over allegations it had broken U.S. laws against selling U.S.-made technology to North Korea and Iran. This morning, ZTE said it would plead guilty and pay nearly $900 million to settle the case.