U.S. President Barack Obama faces a tough decision over whether to relist North Korea as a state sponsor of terrorism for its alleged cyberattack on Sony Pictures, as the decision may have political, diplomatic and security ramifications.

In an interview with CNN on Sunday, Obama indicated that the U.S. may put the North back on the terrorism list. Obama has vowed to respond “proportionally” to the Nov. 24 attack on Sony following the Federal Bureau of Investigation’s conclusion that the North was behind the attack.

In terms of maintaining cyberdeterrence, the U.S. may need to take strong action to prevent a repeat of the incursion, although a strong measure would risk eroding the prospect of improving ties with the reclusive state.

“This is different from the North having mounted a cyberattack on any other country. It was the U.S. that the North has challenged. The U.S. would not let this attack just go unpunished, as it could embolden the North,” said Kim Yeoul-soo, a political science professor at Sungshin Women’s University.

Kim added that when Republicans, holding control of both chambers of Congress, were upping their offensive against Obama’s decision to restore ties with Cuba, Washington may not want to appear weak in handling the cybersecurity issue.

Beyond domestic politics, the handling of the cyberattack is likely to have a boarder impact on the security of the increasingly vulnerable cyberdomain. A lukewarm response to the attack would further embolden the North, which has been striving to build cyberwarfare capabilities that would help it achieve various military outcomes at a low cost.

While facing the need to sternly deal with what Obama called the North’s “cybervandalism,” Obama has also been under growing pressure to seek a breakthrough in the deadlocked relationship with Pyongyang.

Critics have said that the U.S. has employed a policy of “strategic patience” ― some might say strategic indifference ― allowing the North to continue to work on its nuclear arsenal. During Obama’s time in office, the North has conducted two nuclear tests, in 2009 and 2013.

Should the U.S. take strong punitive action, including relisting the North as a state sponsor of terrorism, the prospects for a thaw in relations between Washington and Pyongyang would further dim, particularly at a time when the North berates the U.S. for supporting the passage of a U.N. resolution condemning its dismal human rights record.

With a little over two years left before his term ends, Obama has been turning his attention to legacy issues. Strained ties with Pyongyang will be one less point on his legacy scorecard, observers pointed out.

The decision on the North’s cyberattack could also influence South Korea’s policy toward the North. Seoul has long been in line with Washington’s policy to work with its longtime security ally with one voice.

As the Park Geun-hye government enters the third year of its five-year term, it is expected to spur efforts to improve cross-border ties through increased dialogue and exchanges. But the shaky relationship between the U.S. and the North could limit the room Seoul has to maneuver in its diplomacy toward the North, analysts said.

In 2008, the Bush administration removed the North from the terrorism list to spur international efforts to denuclearize the country. Pyongyang was put on the list in 1988 after a North Korean spy bombed a South Korean passenger plane in November 1987, killing 115 people.

The listing would impose economic sanctions on the North. Given its level of isolation, it would not have much of an impact on the North Korean economy. But it would further damage its national image and ties with the outside world, observers said.

By Song Sang-ho (sshluck@heraldcorp.com)