The Shifting Balance of the Korean-Japanese Trade Relationship

Japan and South Korea are still at loggerheads in a trade dispute that started last month but goes back as far as 1910. Korean consumers have staged a large-scale boycott of Japanese products and have shunned Japan as a holiday destination.

Looking at the development of Japanese and Korean export trade, the confident attitude of Koreans opposite Japan is understandable. Korea depends on Japan for its export economy much less than it used to. In 1990, more than 20 percent of Korean exports were headed for Japan, while in 2018, that had shrunk to less than 5 percent. Japan’s exports to South Korea have been more stable, ranging between 6 and 8 percent of annual merchandise streams.

The trade dispute started in early July when Japan announced that it was curbing the export of substances used to make light-emitting diodes and semiconductors to South Korea. Observers have tied Japan’s confrontational attitude to recent court decisions in South Korea demanding Japan pay compensation to South Koreans forced into sex slavery during the Japanese occupation of the country in the first half of the 20th century. Tokyo denied any such connections.

As far as total numbers go, the volume of exports from Japan to Korea is bigger than the volume of merchandise being shipped the other way.