Asia

A U.S. official on Wednesday called for Japan and Korea to do some “soul searching” amid flaring tensions between the two countries, while Japan on Thursday approved its first export licenses for chemicals used in tech products headed to South Korea after imposing export restrictions last week.

While an escalating trade fight between Japan and South Korea is already affecting U.S. supply chains, the Trump administration has yet to show definitively whether it plans to intervene -- though industry officials and analysts say they would like to see the U.S. do so.

“The president has said 'You know, if you make a good deal or good progress on a deal, maybe he'll be flexible on the tariffs.' On the other hand, if there's no progress on the deal, maybe they'll get worse.”

Trump: “It’s called 'currency manipulation.' ... This is a major violation which will greatly weaken China over time!”

“If you look at the Democratic debates and what people are saying about China, if anything, they are just as tough or tougher. I don’t think it makes sense to try to wait out the administration.”

As it works on a potential trade deal with Japan, the Office of the U.S. Trade Representative is eyeing provisions in trade law allowing for unilateral tariff changes that do not require congressional approval, according to sources familiar with the talks.

“The problem with them waiting, however, is that if & when I win, the deal that they get will be much tougher than what we are negotiating now … or no deal at all. We have all the cards, our past leaders never got it!”

“Trade disputes may be symptoms of deeper frustration with gaps in the rules-based multilateral trading system. Policymakers should cooperatively address these gaps.”

“I plan to explain to all those involved that Japan's measure affects the global economy, with implications for all products that use semiconductors.”