South Korea, Japan Trade Tensions Escalate

The U.S. may have a monopoly on failed music festivals, but we certainly don’t have one on trade wars. Yesterday, Japan dropped South Korea from its list of countries with preferential trade status. South Korea vowed to do the same, and all is officially not well between the two East Asian powerhouse economies.

The backstory: Tensions between the countries go back to Japan’s colonization of the Korean Peninsula from 1910–1945. But the recent trade dispute started on July 1, when Japan tightened controls over three key chemical exports to South Korea.

The tech world has taken notice. South Korean factories rely on those chemicals to make components, and U.S. firms like Apple and Amazon rely on those components to make their own products.

The dispute has led to a not-so-small-scale boycott of Japanese goods in South Korea. Per the AP, sales of Japanese beer at South Korea’s largest retailer dropped 38% from July 1–24. And some gas stations in South Korea are even refusing to fill up Japanese cars.