Japan OKs removing South Korea from preferred trade status

In this July 12, 2019, photo, a notice campaigning for a boycott of Japanese-made products is displayed in Seoul, South Korea. The sign reads: "We don't sell Japanese products." A widespread anti-Japanese boycott has gained ground in South Korea since Tokyo tightened its exports of materials used to manufacture semiconductors and display screens, key export items for South Korea.(AP Photo/Ahn Young-joon)

TOKYO — Japan has approved the removal of South Korea from a "whitelist" of countries with preferential trade status, escalating tensions between the neighbors.

Friday's Cabinet decision expanding controls over exports of sensitive materials takes effect on Aug. 28.

It follows an earlier requirement that Japanese companies' exports to South Korea be approved on a case-by-case basis for three materials used in semiconductors, smartphones and other high-tech devices.

The decision will fuel antagonism between the two neighbors already at a boiling point over the export controls and the issue of compensation for wartime Korean laborers.

It will ripple across the high-tech sector, further affecting supply chains already rattled by U.S.-China trade tensions.

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This story has been corrected to show the decision takes effect Aug. 28, not 23.

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