South Korea-Japan Trade War Explained

In 2018, the South Korean Supreme court ruled that a number of Japanese companies must pay reparations to the workers or their descendants for the time they were forced to work for them during the late colonization period. This sparked a raging trade war between two of the biggest economies in all of Asia.

As a response to this decision, the Japanese government banned the export of three materials used in the production of South Korean smartphones. South Korea is an export-based economy that relies heavily on the export of electronic gadgets in particular. With limited export of fluorinated polyamide, hydrogen fluoride and resists, companies like Samsung, LG and SK stand to suffer greatly. Japan produces 90% of the world’s fluorinated polyimides and resists.  Tokyo argues that Japan has no obligation to put up with the court’s decision as it had already paid reparations and settled this issue in the 1965 normalization treaty, according to which US$800 million were paid in the form of economic aid and loans. Read about Pak Afghan bus service.

Due to the interdependent nature of trade, this will affect numerous countries around the globe. Prices for a certain kind of memory chips that South Korea is the largest producer of, rose by 12% in less than a week and continue. While the stockpile lasted a few months, the prolonged conflict is causing many to switch suppliers to the US, China or Taiwan based producers. To make matters worse, in August Japan took South Korea off the ‘white’ list of countries with minimum trade controls.

South Korea has responded with their own boycotts. Two men burned themselves to death to protest Japan’s government. Boycotting Japanese products is on the rise. High levels of public distaste to Japanese imports is leading to incidents of vandalism and destruction of Japanese vehicles on the road. As people buy less from Japan, Toyota and Honda sales are down by 59% and 81% respectively. Imports of Japanese beer are down by 97%. South Korea has withdrawn from an intelligence sharing pact with Japan for protection against North Korea.

This leads to an important question; what about the South Korea-Japan feud is so important that the country is willing to set aside security concerns over its nuclear power neighbour? The answer is simple. The thirty-five-year long colonization of South Korea under Japan is well remembered and mourned by the people. Certain issues like the ‘comfort women’ from South Korea and other Asian countries who were forced to work in brothels for the Japanese military, are especially sensitive. To add to the matter, visits by the former Prime minister Junichiro Koizumi to the Yasukuni shrine represent lack of repentance for behaviour during the second world war to Koreans. This place is a shrine to the souls of Class A War Criminals during WW2. While the current Prime Minister Shinzo Abe did not personally visit the shrine, he sent offerings instead.

To conclude, the South Korea-Japan trade war is the consequences of a long history of distrust and conflict. The wounds left my colonization must be healed, if that is even possible, for a future of peaceful trade relations.