South Korean President Moon Jae-in warned top business leaders of an extended battle with Japan over its export controls on vital manufacturing materials, raising concerns their latest fight could disrupt global supply chains.
On Wednesday, Moon told executives from about 30 companies including Samsung Electronics Co., SK Group, Hyundai Motor Co. and Lotte Group, that he saw Japan targeting South Korea’s economy for political gains. Japan last week imposed curbs on highly specialized products needed to make semiconductors and computer displays, and could also remove its neighbor from a list of trusted buyers.
“Despite our diplomatic efforts, we cannot rule out the possibility of this situation becoming prolonged,” Moon said. “Our government is forming a response system demanding Japan to withdraw its unfair export limit measures with a sense of urgency,” Moon said in Seoul, calling the current situation an “unprecedented emergency.”
Japan has said it made the move to ensure proper security and questioned its trust of South Korea after courts there last year ruled that Japanese companies needed to pay compensation to Koreans conscripted to work at mines and factories during Japan’s 1910-45 colonial rule over the Korean Peninsula. Tokyo said all claims were settled by a 1965 treaty and that it didn’t see the court decisions as valid.
The dispute has moved into the economic arena what the two see as proper contrition for Japan’s colonial rule. Past fights have mostly kept industries on both sides out of the fray but the worry now is that tensions between the major trading partners and U.S. allies could spiral out of control.