Japan OKs removing South Korea from preferred trade status

Japan has approved the removal of South Korea from a "white list" of countries with preferential trade status, escalating tensions between the neighbors.

A container ship in the sea, Busan, Yeongnam, South Korea. [File Photo: IC]

Friday's Cabinet decision expanding controls over exports of sensitive materials takes effect on Aug. 28.

It follows an earlier requirement that Japanese companies' exports to South Korea be approved on a case-by-case basis for three materials used in semiconductors, smartphones and other high-tech devices.

The decision will fuel antagonism between the two neighbors already at a boiling point over the export controls and the issue of compensation for wartime Korean laborers.

It will ripple across the high-tech sector, further affecting supply chains already rattled by U.S.-China trade tensions.