South Korea-Japan trade fight risks ‘further escalation’ – CNBC

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Washington has also been pulled into the trade battle between the North Asian neighbors, and it remains to be seen if the U.S. will weigh in on the situation. Japan and South Korea are two of Washington’s biggest allies in the region.

David Stilwell, the top U.S. diplomat for East Asia policy, met South Korean officials in Seoul on Wednesday, according to Reuters. He said Washington will “engage in all issues that are related to South Korea and the United States,” but avoided responding directly to questions on what role the U.S. will play in the conflict.

Stilwell reportedly told Japan’s NHK broadcaster last week that the U.S. will not intervene in the dispute.

Experts are not sure if the Trump administration will actually get involved in the Korea-Japan dispute or not.

“Prior (U.S.) administrations would have tried to work behind the scenes to de-escalate tensions between the two countries,” said Troy Stangarone, senior director of congressional affairs and trade at the Korea Economic Institute of America.

“However, it is unclear how the Trump administration will be involved. Ideally, they would encourage both governments to engage in dialogue to find a reasonable solution to the current dispute,” Stangarone told CNBC via email.

Last Wednesday, South Korea’s Foreign Minister Kang Kyung-wha told U.S. Secretary of State Mike Pompeo that Japan’s restrictions may not only damage South Korean companies, but could also disrupt the global supply chain and hurt U.S. firms, according to Reuters.

The U.S. State Department later issued a statement noting the importance of U.S.-Japan-South Korea trilateral cooperation, and agreed to continue working closely to address common challenges in the region.

Koll said the probability of the U.S. stepping in as an active mediator is very low.

“The Trump administration is not afraid to weaponize trade,” he said, adding that using trade to settle political disagreements may seem reasonable to the current U.S. administration.

In Trump’s world, it’s America first, Koll pointed out — as for the rest of world, “that’s (their) problem.”

Source Article from https://www.cnbc.com/2019/07/17/south-korea-japan-trade-war-risks-escalation-impact-on-tech-firms.html

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