Moon Jae-in and Shinzo Abe
South Korean President Moon Jae-In is welcomed by Japanese Prime Minister Shinzo Abe upon his arrival for a welcome and family photo session at G20 leaders summit in Osaka, Japan, June 28, 2019. (Photo: REUTERS/Kim Kyung-Hoon/Pool)

Japan and South Korea's (SoKor) trade tensions are fueling up as S. Korean President Moon Jae-in spoke up in what could be his most backboned comments yet regarding the issue. Moon said the tightening on exports to his country will hurt Japan more.

According to Japan Today, Moon said on Monday that Japan's move of tightening high-tech exports to South Korea will put the two countries' economic and diplomatic ties at risk and is a form of retaliation. He added that the Japanese government's latest trade curbs will have a bigger impact on the island country more than on the SoKor side.

Earlier this year, the South Korean government asked Japanese firms to compensate the people of the SoKor region who were forced to work for Japan during the Second World War.

South Korea is reportedly planning to lodge a complaint with the World Trade Organization (WTO) at next week's General Council meeting. It is unclear how Japan will respond if the complaint pushes through.

Despite the apparent shake-up in cooperation between the two countries, Moon noted that the problem can be an opportunity for Japanese businesses. He said SoKor businesses in the manufacturing sector can now "break out of their dependence on Japanese materials, components, and equipment."

Moon further noted that South Korean manufacturing firms can "work toward diversifying import sources or localizing the technologies." Finally, he warned that Japan's economy will suffer more than his side.

Economists have raised concerns about the ensuing trade tensions between two of Asia's most interconnected neighbors. Experts stressed that a full-blown Japan-SoKor trade war could also take a toll on the global economy just as the China-U.S. trade war did.

On July 24, Tokyo will make a decision regarding the possibility of removing South Korea from its "White List" of trusted partners. The government will review trade terms before a decision is made.

The products that could be affected by Seoul's removal in the list include crane trucks, isostatic presses carbon fiber, generators, and more. The said items are expected to be restricted by Tokyo, potentially resulting in losses for many South Korean businesses.

Moon's strong stance against Japan came after dozens of small business owners rallied in the South Korean capital to call on consumers to boycott Japanese goods. President of the Korea Mart Association, Kim Sung-min called on store owners to stop acquiring goods from the island country until an apology is handed out by Tokyo or the trade restrictions are lifted.

Petitions to boycott Japanese products have also been submitted to Seoul's presidential websites. Thousands of South Koreans have signed the petitions but a formal announcement regarding the calls for a boycott has yet to be announced.