On July 1st, the Japanese government began restricting exports of two chemicals, fluorinated polyimide and hydrogen fluoride; chemicals needed to produce semiconductors and smartphone and television screens. South Korea is dependent on Japan for this supply. Japanese officials claim the chemicals are “controlled items” (goods with civilian and military applications), and have been “inadequately managed” by South Korean companies.
However, South Korean officials believe the real motive for restricting imports of the two checmicals is a political dispute between the two countries and a recent South Korean court ruling that resulted in the seizing of assets of a Japanese company to pay for reparations for Japan’s actions during World War II.
Japanese exporters of the chemicals now need a license for each one with delays taking up to 90 days. In the meantime, South Korean companies are looking for new suppliers even though stockpiles of the checmicals are enough to meet the current demand.
As in most disputes between two nations, the citizens (well, businesses) lose, South Korean companies can’t purchase the chemicals they want and Japanese companies can’t sell the chemicals they don’t need.