By Philip Rucker, Simon Denyer, David Nakamura, Washington Post–

President Trump and North Korean leader Kim Jong Un abruptly cut short their two-day summit Thursday after they failed to reach an agreement to dismantle Pyongyang’s nuclear weapons.

Talks collapsed unexpectedly amid a disagreement over economic sanctions, with the two leaders and their delegations departing their meeting site in Vietnam’s capital city without sitting for a planned lunch or participating in a scheduled signing ceremony.

Kim said he was prepared in principle to denuclearize, and Trump said an agreement was “ready to sign.” But Trump said the main impediment to a deal was Kim’s requirement that the United States lift all economic sanctions on North Korea in exchange for the closure of only one North Korean nuclear facility, which still would have left Pyongyang with a large arsenal of missiles and warheads.

“We had some options, but at this time we decided not to do any of the options,” Trump said. He added, “Sometimes you have to walk, and this was just one of those times.”

For Trump, the surprising turn of events amounted to a diplomatic failure. The president flew 20 hours to Vietnam with hopes of producing demonstrable progress toward North Korea’s denuclearization, building upon his first summit meeting with Kim last summer in Singapore.

The breakdown sent shivers through financial markets in Asia, with South Korea’s stock market falling sharply just before the close of trading to end down 1.8 percent. The South Korean won also slipped, and Japan’s main Nikkei 225 share index ended down 0.8 percent.

At a news conference before he departed Vietnam to return to Washington, Trump said he and Kim did not commit to holding a third summit. Secretary of State Mike Pompeo said he hoped negotiators from the two countries could narrow differences in the future, but he did not announce any firm plans to continue talking.

Trump said Kim promised he would not conduct missile launches or test nuclear weapons. And he said Kim was willing to close Yongbyon Nuclear Research Complex, the site of North Korea’s main nuclear reactor and its only source of plutonium to make bombs. But Trump said other covert facilities to enrich uranium had not been offered up.

Trump zeroed in on sanctions as the key sticking point in his talks with Kim.

“It was about the sanctions,” he said. “Basically they wanted the sanctions lifted in their entirety, and we couldn’t do that. They were willing to denuke a large portion of the areas that we wanted, but we couldn’t give up all of the sanctions for that.”

Pompeo said, “I wish we could have gotten a little bit further,” but added that he was optimistic about the progress that was been made simply by meeting.

“Unfortunately we didn’t get all the way,” Pompeo said. “We didn’t get to something that ultimately made sense for the United States of America.”

It was clear that the two sides remain far apart on some key issues, including a pretty fundamental one: What denuclearization of the Korean Peninsula actually means. It is still not clear what demands Kim would place on U.S. forces in South Korea and in the region for him to be willing to surrender his nuclear arsenal.

“He has a certain vision,” Trump said. “It’s not exactly our vision, but it’s a lot closer than it was a year ago.”

In the run-up to the talks, the United States had been offering to declare an end to the 1950-53 Korean War, open liaison offices in each other’s capitals, and had been demanding North Korea at least agree to close down its production of fissile material to make bombs. The United States appeared willing to offer some mild sanctions relief in return for such a deal, but insisted the sanctions imposed by the U.N. Security Council had to stay intact until North Korea fully denuclearizes.

But it was clear the North Korea counter-offer still left a large gap between the two sides.

Still, following two days of meetings with Kim at the lavish Metropole hotel in downtown Hanoi, Trump continued to lavish praise on Kim. He called him a great leader and boasted about the warmth of their friendship.

Trump did not address Kim’s record of brutality and human rights atrocities during his Vietnam trip.

Asked by a reporter whether he had discussed with Kim the case of Otto Warmbier, the University of Virginia student who was detained in North Korea for 17 months for allegedly stealing a propaganda poster, Trump said he had.

Warmbier was in a coma through most of his imprisonment, and died shortly after being sent home. Kim rules a totalitarian state, and his government has insisted Warmbier was nothing but a “criminal.”

Yet Trump said Kim denied to him any knowledge of or role in his treatement.

“He tells me that he didn’t know about it and I will take him at his word,” Trump said. “Those prisons are rough. They’re rough places and bad things happen. But I don’t believe he knew about it.”

Analysts have said Trump’s strategy of engaging Kim was risky, given that U.S. intelligence officials have said the North Korean leader is unlikely to surrender an arsenal that is thought to include anywhere between 20 and 65 nuclear warheads.

Although Trump has pointed to a moratorium on testing that has been in place since November 2017, U.S. intelligence has discovered evidence that the North has sought to conceal its weapons programs despite publicly engaging with the United States and South Korea in denuclearization talks.

Administration officials, led by the State Department, had worked over the past two weeks to try to nail down specific commitments from Pyongyang to advance the process, but progress has been slow, according to U.S. and South Korean officials familiar with the talks.

Sitting beside Kim on Thursday morning, Trump said the pair had enjoyed very good discussions over dinner the night before, with “a lot of great ideas being thrown about,” adding that “importantly, I think the relationship is, you know, just very strong.”

“And when you have a good relationship, a lot of good things happen. So, I can’t speak necessarily for today, but I can say this that, a little bit longer-term, and over a period of time, I know we’re going to have a fantastic success with respect to Chairman Kim and North Korea.”

Trump repeatedly stressed there was “no rush” to make a deal. “Chairman Kim and myself, we want to do the right deal. Speed is not important,” he said.

And Kim said he was ready to denuclearize, at least in principle. “If I’m not willing to do that, I wouldn’t be here right now,” he said through an interpreter.

Both Kim and Trump also said they would welcome the idea of opening a U.S. liaison office in the North Korean capital. Washington does not have direct diplomatic representation in Pyongyang.

Asked if he was confident the pair would reach a deal, Kim was equally guarded.

“It’s too early to tell. I won’t prejudge,” Kim said in reply to the question from a Washington Post reporter, a rare response from a North Korean leader to an independent journalist. “From what I feel right now, I do have a feeling that good results will come.”

On Thursday morning, Trump and Kim arrived in separate motorcades for the second day of summit talks at the hotel. After speaking to reporters seated in front of U.S. and North Korea flags, they strolled briefly through the hotel, pausing to chat briefly with Pompeo and his North Korean counterpart, Kim Yong Chol, by the pool.

Trump’s warm greeting of Kim on Wednesday night suggested that the president was hopeful that their personal rapport could help bridge gaps in the negotiations among lower-level aides ahead of the summit.

Trump said the biggest area of progress since Singapore was their “relationship,” and in a tweet after their dinner Wednesday he said the two had “very good dialogue.” The dinner of grilled sirloin and chocolate lava cake was an attempt to continue to foster trust ahead of a series of meetings Thursday, during which Kim said the whole world was watching them.

“There would be people welcoming, and people viewing our meeting with skepticism,” the North Korean leader said, “but there would also be people who would look at us spending a great time together, like a scene in a fantasy movie.”

John Hudson contributed to this report.

philip.rucker@washpost.com

simon.denyer@washpost.com

david.nakamura@washpost.com