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Thursday, July 25, 2019

The Korean reaction to trade dispute with Japan

As shown in this chart published by Statista, (click on it for a full size version) the Korean public has had an immediate and overwhelmingly negative response to Japan's announcement of restrictions on the export to Korea of materials essential for the manufacture of semiconductors, displays and smart phones. Japan controls a dominant share of the global market for these materials, while the Korean companies  have a similar dominant presence in the global market for semiconductors (Samsung and SK Hynix), displays (Samsung and LG) and smart phones (Samsung, LG).  Consequently, the dispute could have a big negative effect on global supply chains for these essential electronics products. 
As reported by Statista,"According to reporting by The Korea Times and The Guardian, supermarkets and travel agents in South Korea reported sales losses from around 10 percent for Japanese Natto, a fermented soybean product, up to a decrease of 70 percent in travel bookings from Korea to Japan. Half of those who have booked a Japanese vacation are also currently canceling.
Some stores in Korea have cleared their shelves of Japanese products altogether and there have been reports of gas stations refusing to fill up Japanese model cars. Beer was also on the hitlist, with shops reporting sales losses of up to 40 percent for Japanese companies."

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