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The Intelligence from The Economist

At stake, chips: Japan-South Korea trade spat

The Intelligence from The Economist

The Economist

Global News, Daily News, News

4.53.7K Ratings

🗓️ 16 July 2019

⏱️ 22 minutes

🧾️ Download transcript

Summary

A dispute about industrial chemicals reveals tensions that have remained unresolved since the second world war—and threatens the global electronics market. In the Indian state of Assam, a trumped-up rule on citizenship singles out Muslims for detention and deportation. And, a look at why American and European working hours have diverged so much.

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Transcript

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0:00.0

Hello and welcome to the Intelligence on Economist Radio. I'm your host, Jason Palmer.

0:10.0

Every weekday we provide a fresh perspective on the events shaping you a world.

0:18.0

India's Hindu nationalist government is on a mission. In the state of Assam, it's declared

0:22.6

4 million people overwhelmingly Muslims to be illegal immigrants. It's likened them

0:27.6

to termites and is planning 10 new detention centers. That drives just the kind of sectarian

0:33.3

division that benefits the ruling party. And it's true that on average Americans work

0:39.4

longer hours than their European counterparts. But it wasn't always this way. So why have

0:45.2

transatlantic times of toil been diverging for 40 years?

0:56.2

They are neighbors who share a friendship with America but not with each other. Political

1:04.6

tensions between Japan and South Korea date back well over a century. But recently the

1:09.8

relationship has deteriorated sharply. At the beginning of the month Prime Minister Shinzo

1:15.0

Abe limited South Korea's access to Japanese chemicals that are essential to its semiconductor

1:20.1

industry. South Korea manufactures 60% of the global supply of memory chips. So the embargo

1:27.1

threatens the world market for phones, computers, and just about every other kind of electronic

1:32.0

gizmo. Mr. Abe's decision bears the hallmarks of a trade approach adopted by President Donald

1:37.4

Trump. The rules it seems are changing, eroding established global norms that have prevented

1:44.1

trade disputes from spiraling out of control.

1:48.7

So Japan on July 4th began to restrict supplies of three different industrial chemicals to

1:54.5

South Korea. Simon Rebenovich is our Asia economic

1:57.3

senator. The chemicals sound relatively obscure but they're actually critical to the manufacture

2:02.9

of semiconductors and smartphones more generally. And this is significant because Japan produces

2:09.7

roughly 90% of the global supply of these three different chemicals. South Korea in turn

...

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