Intra-Asian protectionism? Japan restricting semiconductor exports to South Korea

Japan's move prompts concerns about supply chains . . .

Japan has announced it will restrict the export of semiconductor-related materials to South Korea. Japan’s Ministry of Economy, Trade, and Industry also hinted it would remove South Korea from its export ‘white list,’ which would mean Japanese exporters would have to apply for licenses to sell high-tech goods to South Korea. Industry stakeholders in both countries criticized the move, citing concerns about impacts on the entire semiconductor supply chain.

Tokyo-Seoul relationship souring . . .

Japanese Prime Minister Shinzo Abe attributed the move to “broken promises” from South Korea, referring to the latter’s court decision ordering Japanese companies to pay compensation for forced wartime labour during the colonial era. South Korean President Moon Jae-in has taken a forceful stance towards Tokyo, and tensions over unresolved historical disputes have risen. Tokyo is reportedly considering further expanding the export restriction list. With the upcoming Japanese election for the House of Councillors on July 21 and South Korea’s National Liberation Day on August 15, a lowering of tensions in the near future is unlikely.

Art of the deal, Abe style . . .

Analysts have compared Tokyo’s move to U.S. President Donald Trump’s use of trade restrictions for political means. Japan’s preliminary review of removing South Korea as a preferred trading partner cited concerns over Seoul’s capacity to contain the spread of strategic materials, essentially attaching national security concerns to the decision to restrict trade with Seoul. The spat underscores how unresolved historical disputes continue to plague the relationship.

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