The battle between South Korea and Japan is “a dead-lock” since it comes in the middle of an ongoing international trade war that the U.S. and its trading associates are involved in, an economist stated. For long, Seoul and Tokyo had political disagreements arising from Japan’s conduct throughout the Second World War. The disagreement between the neighbors expanded in the economic field when Japan previously in this month limited exports of materials important to South Korea’s high-tech industry, mentioning national security concerns. South Korea and Japan are major exporters of products like smartphone displays and chips.
An enlarged trade fight amid the two can be bad news for the technology industry globally and consumers might have to pay extra for products. Taimur Baig—Chief Economist at DBS Group Research—said to CNBC, “This development that we are seeing now is disrupting and contrary for the economic sentiment globally. To start with, we previously have so much around the trade spat between the world and the U.S.” He further added that South Korean and Japanese companies have spent many years for building up “complicated” supply chains, and it will be very hard to redo such arrangements when belief amongst all those involved has been violated.
On a related note, South Korea cautioned that Japanese economic blow can backfire. In the recent escalation of rhetoric amid feuding neighbors, Moon Jae-in—President of South Korea—warned Japan that any attempt to stop or hinder his nation’s financial development “will not succeed.” Moon reported in a cabinet meeting that he was alert that export limitations enforced by Japan previously in this month aimed South Korea’s semiconductor industry and “the country’s central competitiveness.” He expressed assurance that regional companies will be capable of surmounting short-term troubles to lower their dependence on Japanese vendors.