The labor row between Japan and South Korea has now turned into threats of punitive tariffs – with threats of retaliation from both sides. South Korea has seized assets of a Japanese firm and from this trigger the relationship between these two Asian powers continues to deteriorate further. And to bring both parties to the table, Tokyo is now calling for Seoul to hold talks based on a 1965 bilateral pact on wartime claims to settle wartime claims.
This diplomatic battle started after a South Korean court ordered Nippon Steel & Sumitomo Metal Corp and Mitsubishi Heavy Industries Ltd., to pay for wartime labor suits by Korean plaintiffs. Note that Japan occupied the Korean Peninsula from 1905 to 1945, turning the Korean people into Japanese speakers. Some older Koreans still speak Japanese. So the situation is tense and both sides have raised the bar in terms of firing insults. One South Korean lawmaker verbally attacked the Emperor of Japan, an act that is never taken lightly as the Japanese people view him as the Head of State. Japan has demanded an apology for this outburst.
Japan has now said that if the assets of these above mentioned firms are sold, Tokyo will have no choice but to slap on tariffs that will, in the end, cost the South Korean firms the same amount of the money that Japanese firms have lost. Tokyo is now expected to make a decision on tariffs only after checking with The World Trade Organization rules and the expected impact on the Japanese economy.
Japan is now working to set up an arbitration committee that will include third party countries that will work to help these two economic powerhouses to work out their differences with support from the outside.