Photo: President Moon Jae-in speaks at the conference on materials industry regarding Japan's export control. Credit: Website of the Office of the President.
On July 1, 2019, the Japanese government implemented export controls on three critical materials for high tech products - hydrogen fluoride, photoresist and fluorine polyamide, over which Japan had between 70% and 90% of the global market share at the time - as a retaliation against South Korean court orders against Japanese corporations to pay reparations for slave labor during World War II. Japan’s trade war, intended to kneecap South Korea’s semiconductor and display industries, touched off a diplomatic firestorm, with Seoul going to the brink of canceling the intelligence-sharing agreement with Japan before changing course as a result of US pressure.
Although ROK-Japan relations have yet to improve, the damage to South Korean industries as a result of Japan’s trade war has been minimal. A former Blue House 청와대 staffer recently shared an episode in which the presidential advisors suggested a “diplomatic resolution” to the President Moon Jae-in 문재인 대통령 in response to the trade war. Moon chastised his advisors, saying this was the moment to achieve independence from Japan in the materials industry.
Two years later, South Korea has done precisely that: in 2020, hydrogen fluoride imports from Japan dropped by 86% compared to 2018, as domestic firms and other manufacturers in China, Taiwan and the United States replaced Japanese companies in the supply chain. Attending the Korea International Trade Association 한국무역협회 conference on the materials industry, Moon said dependence on Japanese materials in the top 100 critical products was lowered from 32% to 25% in the past two years.