Japan’s cabinet on Friday approved a plan to remove South Korea from a “white list” of trusted trading partners, escalating the already damaged diplomatic relations between the two states in regard to wartime reparations. In response, South Korean government also revealed plans to remove Japan from its own white list.
This decisions come amid an escalating trade war between the world’s most powerful economies, US and China, and is expected to further disrupt supply chains.
Specifically, this move by South Korea follows an already established imposition of a requirement for Japanese companies to receive case-by-case approval for the export of industrial materials used for semiconductors, smartphones and other high-tech devices.
Starting from 28 August, the new decision will apply a stricter approvals process to an expanded list of materials that could be diverted to military use.
This means that Japanese firms will need to take additional administrative procedures to obtain licenses when exporting to South Korea, to ensure that the products shipped are not diverted to military use.
Japan says the trade measure was taken in response to problematic South Korean export controls that impact national security.
South Korea confirmed they would be reciprocating the move by taking Japan off their “white list.”
Amid increased uncertainty surrounding global supply chains, the US announced last week an additional tariff of 10%, starting from 1 September, on the remaining 300 billion dollars of goods and products coming from China into the US.
