Japan and South Korea are embroiled in a bitter trade war that has security consequences for Northeast Asia and beyond. The rift is deep because of historical animosity in a hyper-charged political and security environment. The dispute is so serious that Japan is lowering South Korea’s standing as an important security cooperation partner in this year’s defense white paper. The current draft places South Korea fourth this year, after Australia, India and the Association of Southeast Asian Nations. This downgrade is deeply insulting. It is important to note that bilateral ties have deteriorated sharply since last year due to a series of court rulings in South Korea that ordered Japanese firms to pay damages for wartime forced labor during Japan’s 1910-1945 colonization of the Korean Peninsula. In 2018, South Korea’s Supreme Court ruled that Japanese companies Mitsubishi Heavy Industries and Nippon Steel & Sumitomo Metal must compensate the victims of the forced labor. Japan responded by arguing that Tokyo had paid restitution through a 1965 agreement in which Seoul received $500 million in aid to normalize their relationship. These historical grievances matter and the issues have been growing in intensity over the past few years. Both Japan and South Korea have nationalist tendencies and claim various islands (Takeshima Islands/Dokdo Islands). More importantly, because of their respective cultures and memories, there is a sharp focus on the crimes of the past, in particular when considering various violent historical episodes between the two countries and especially regarding the “comfort women” who were forced into sexual slavery by the Imperial Japanese Army. The anger between the countries is felt in their resulting trade fight. Tokyo is citing national security concerns arising from Seoul’s “inadequate management” of exports of sensitive chemicals, including hydrogen fluoride, which can be used for the manufacture of chemical weapons by countries subject to international sanctions. To make matters worse, Japan claimed South Korea was giving sensitive information to North Korea. In retaliation, Seoul is removing Japan’s status of preferred trade partner and creating a low-tier category for Tokyo that places the country in an embarrassing position. South Korea is reminding Japan of the painful lessons of Japanese actions in the first half of the 20th century. More dramatically, South Korean President Moon Jae-in dissolved the Reconciliation and Healing Foundation, an organization funded by the Japanese government that supported South Korean victims of Japan’s wartime sexual slavery. This move helped to trigger the trade war we are seeing now. This trade war alters the supply chain of key electronic components. South Korean companies Samsung and SK Hynix supply 60 percent of the world’s DRAM memory chips, which are used in many electronic devices. South Korean chip manufacturers are hitting a dead end in their efforts to find alternative suppliers of key Japanese materials that have been hit with export restrictions, raising the prospect of major disruption to their operations in coming months. It turns out that South Korea is very reliant on Japanese products across a range of sectors and is learning how difficult it is to find substitutes quickly during the current trade spat. Tension between Japan and South Korea could not only damage the global economy but undermine the Trump administration’s policies toward North Korea and the rest of the Western Pacific. Dr. Theodore Karasik The defense and security arena is more damaged as the disputes have also moved into the military realm. In December 2018, a South Korean naval destroyer directed its fire-control radar at a Japanese P-1 patrol aircraft. Tokyo canceled working-level defense talks with Seoul as a result of the incident. Now, South Korea is threatening to end a 2015 military intelligence-sharing pact with Japan that is about to expire. The General Security of Military Information Agreement is vital for Japan and South Korea to collect and share information about North Korea’s missile and nuclear development with the US. Tension between Japan and South Korea could not only damage the global economy but undermine the Trump administration’s policies toward North Korea and the rest of the Western Pacific. The US-led trilateral security system on which both Seoul and Tokyo rely is being damaged by this confrontation between the Northeast Asian neighbors. Russia and China are already taking advantage of the situation by making sovereignty claims and testing airspace. An outcome in which Japan and South Korea continue downgrading their security relationship would be beneficial to Russia and China, who would use such an opportunity to strengthen their cooperation in the two Northeast Asian states. Since the 1990s the US has pushed for intelligence-sharing arrangements with Japan and South Korea to help build a framework to check Chinese and Russian military expansion in the Pacific, so the breakdown of this agreement is not in anyone’s security interests. There is little doubt that more attention needs to be paid to this escalating row, especially since nationalism, as a driver, when combined with memories of the past is a powerful testament in both Japanese and Korean societies. Social outpouring of these grievances is strong and affects generations. The politics of these memories is a factor driving the political divide between the two countries, which will only be reversed when they are forced to cooperate because of security concerns. It is necessary to focus on this rift deeply.