As Malcolm Turnbull heads to Germany for talks with other G20 leaders, Mr Joyce is ramping up pressure on China to step in and "stop this madness".
His call comes after the US ambassador to the United Nations Nikki Haley warned America would use force "if we must" against North Korea, after Pyongyang tested an intercontinental ballistic missile with the potential to reach Darwin or Alaska.
"No one should ever go too far in testing the resolve of the United States of America," Mr Joyce told Sky News on Thursday.
"If North Korea was to deliver a warhead into the United States of America then the ANZUS alliance would be called in."
Asked what action that may involve, Mr Joyce said: "What would you want".
"If someone drops a nuclear warhead on a country what do you think happens next."
Earlier, Mr Joyce revealed Australia had "sympathy" with calls to impose trade sanctions on countries such as China in retaliation for giving North Korea an economic lifeline.
Mr Joyce argued the greatest economic threat to China was North Korea's potential to create instability in the region.
Asked about a US warning to cut off trade with countries doing business with North Korea, he told ABC radio: "We obviously have sympathy."
Countries should not be supporting other nations who aided a rogue leader.
But Mr Joyce warned the effect of trade sanctions would pale into insignificance against what would happen if North Korea continues down its nuclear program path.
"If North Korea was to make a mistake in one of its launches ... and drop one of their missiles into South Korea or onto Japan then the economic plan for China, the economic plan for South East Asia would cease that moment."
Labor called on the prime minister and foreign minister to clarify whether the government is considering such sanctions.
"The government must urgently clarify this, and one day into his overseas travel, the prime minister must pull his deputy into line," opposition trade spokesman Jason Clare and foreign affairs spokeswoman Penny Wong said in a statement.
Trade sanctions on China would devastate Australian farmers, they said.
US President Donald Trump has again criticised Beijing for continuing trade with Pyongyang.
"Trade between China and North Korea grew almost 40 per cent in the first quarter. So much for China working with us - but we had to give it a try!," Mr Trump tweeted.
