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Abe Tries Wielding a Trump-Like Trade Hammer

While Abe denied it was retaliation, South Korean President Moon Jae-in warned today he would take further action if Tokyo budge.

Abe Tries Wielding a Trump-Like Trade Hammer
Shinzo Abe, Japan’s prime minister and president of the ruling Liberal Democratic Party (LDP), speaks during a news conference at the party’s headquarters in Tokyo, Japan (Photographer: Kiyoshi Ota/Bloomberg)  

(Bloomberg) --

Shinzo Abe is borrowing from Donald Trump’s playbook.

Japan’s prime minister is tightening controls on exports of material vital to South Korea’s tech industry, shortly after Japanese companies were held liable in a Seoul court for cases of forced labor before and during World War II.

While Abe denied it was retaliation, South Korean President Moon Jae-in warned today he would take further action if Tokyo didn’t reverse course.

The melee shows how countries – China is another one with a track record here – are increasingly using trade leverage in political disputes, with potentially disruptive consequences for global supply chains.

While the Trump administration officially cited national security concerns in blacklisting Huawei Technologies, the U.S. president has since used the company as a bargaining chip in his trade war with Chinese leader Xi Jinping.

Trump’s actions are particularly risky when it comes to Japan and South Korea, both longtime U.S. allies with a history of conflict dating back decades. Instead of playing the role of mediator, he's used U.S. economic weight to demand better terms for basing troops in each country.

As such, it’ll be hard for Trump to tell Abe not to put “Japan First” when it comes to South Korea ties.

Abe Tries Wielding a Trump-Like Trade Hammer

Global Headlines

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  • Click here for more on why Trump is seizing on the issue, in the first installment of Campaign Update, which will provide up-to-the-minute news and analysis on the 2020 race, weekdays on the Bloomberg Terminal and Bloomberg.com.

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What to Watch

  • Iran may choose to enrich uranium at 20% purity level as its next step in a new policy that’s gradually undoing the restrictions imposed by the 2015 nuclear deal, the official Islamic Republic News Agency reports.
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  • This could be a critical week for Trump’s lawyers in their fight to keep the president’s financial records out of the hands of congressional Democrats. 

And finally... Trump put his feud with the co-captain of the U.S. women’s national soccer team on ice following yesterday’s historic World Cup win, telling the players, “America is proud of you all!” On June 26, Trump took on Megan Rapinoe — a purple-haired LBGTQ rights activist whose goal helped clinch the team’s fourth title — for saying she wouldn’t go “to the f__king White House” if the team won, based on her opposition to Trump’s policies. "Megan should WIN first before she TALKS,” Trump said at the time.

Abe Tries Wielding a Trump-Like Trade Hammer

--With assistance from Kathleen Hunter, Onur Ant, Flavia Krause-Jackson, Raymond Colitt and Iain Rogers.

To contact the editor responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Rosalind Mathieson

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