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KEI Spotlight

Japan's Economic Restrictions on South Korea Are Overkill

August 6, 2019

KEI Senior Director and Fellow Troy Stangarone underscores how Japan's decision to remove South Korea from its whitelist of trusted export desitnations is a deeply disproportionate response to the court decision on wartime forced labor compensation.

Regarding Japan's claim that the whitelist removal is a response to legitimate security concerns, Stangarone notes that Prime Minister Abe's office asked multiple government agencies to come up with ways to apply pressure on South Korea following court ruling. In addition, Japan's initial press release announcing its decision to place restrictions on three chemicals critical for semiconductor fabrication included a fact sheet on the issue of forced labor. These suggest that the two issues are tied in the minds of Japanese policymakers. 

Were Japan to compensate victims of Japan's WWII atrocities, the amount would pale in comparison to the cost that Japan's policies are imposing on Korean firms. Samsung alone could see billions in losses. Meanwhile, there are currently 1,300 plaintiffs in cases against Japanese companies – even if Japanese firms compensate these victims at the high end of settlements, the liability would be approximately around $175 million. 

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