Reportedly, rising trade tensions amid South Korea and Japan might appear like a local dispute, but if it continues they can disrupt the high-end technology industries on an international scale, stated the CEO of South Korea’s sovereign wealth fund. In recent time, South Korea demoted trade relations with Japan and removed Tokyo from its list of favored associates that receive fast-track sanctions. This move was said to be in retribution against Tokyo’s verdict in the past month to eliminate Seoul from its privileged list of trusted trade collaborators.
During the Singapore Summit, Heenam Choi—CEO and Chairman at the Korea Investment Corporation—said to CNBC that if the trade spat amid the two neighboring nations persists in the long run, it can have a big impact “as it may disrupt the value chain globally, in particular in the high technology sector. We are extremely worried about that kind of trade tension.” Some of these high technology products that both nations purchase buy from each other comprise electronic equipment, parts such as integrated circuits and different materials used to manufacture smartphones, computers, and cars. The global manufacture for these high-value goods can be interrupted if their trade conflict persists.
On a similar note, former Singapore diplomat Kishore Mahbubani said that China can either benefit from Japan-South Korea conflicts or try to alleviate them. The ongoing trade clash amid Japan and South Korea offers an “interesting impasse” for China. With its neighbors competing on its doorstep, Beijing might benefit from the geopolitical tensions arising from their conflict. Or it can adopt an “informed view” and try to ease clashes amid Seoul and Tokyo. In recent months, Japan and South Korea have clashed over historical and territorial disputes and have eliminated each other from a preferential list of trading allies.