The Japanese government is likely to implement additional export restrictions against South Korea in the near future and the next targets are likely to be automobiles and machinery, an analyst at Samsung Securities said on July 16.
“Export restrictions targeting the two industries have a smaller impact on global supply chains than those applied to the semiconductor industry, which means the Japanese government can avoid criticism from the international community even after the additional restrictions,” Yoo Seung-min, head of the investment strategy team of Samsung Securities, said.
According to statistical data of the Korea Customs Service, Japanese cars accounted for 11.8 percent of South Korea’s total car imports last year and the ratios were 32.3 percent and 18.7 percent when it comes to special-purpose machinery and machinery for general use, respectively. For reference, the ratio was 8.3 percent in the case of semiconductors and 19.9 percent in the case of precision machinery.
“The current disputes between South Korea and Japan are unlikely to get worse to the point of devastating both countries’ economies and industries,” he continued to say, adding, “An extreme confrontation will have a negative impact on the global economy and Asia’ regional security.”