South Korea Deports Japanese Military Attaches, Boycotts Japanese Goods

South Korea’s feud with Japan continued escalating on Wednesday with reports that two Japanese military attaches have been deported for allegedly stealing confidential information about North Korea.

South Korean retail outlets are also beginning to boycott Japanese goods and shoppers are turning away from Japanese imports.

The Korea Times reported Wednesday that the deported Japanese attaches were accused of collaborating with a former South Korean Defense Intelligence Command (KDIC) official and a North Korean defector to purloin papers pertaining to North Korean missiles, submarines, and sanctions violations.

Korea Joongang Daily reported on Wednesday that both retail chains and small shops in South Korea are banishing Japanese goods from their shelves, even when they know the boycotts will cost them a significant amount of income. Boycotted imports include food, beer, electronics, and fashion items. The South Korean fashion industry has noted protesters picketing boutiques with “Boycott Japan” signs.

Japanese beer seems especially hard hit, with sales of some brands dropping by double-digit percentages within days of Japan announcing export restrictions on sensitive materials because it accused South Korea of allowing them to be smuggled into North Korea.

“Some Japanese restaurants and bars are voluntarily halting sales of Japanese beer and other drinks, and apologizing to customers for being in the izakaya business,” Korea Joongang Daily said.

An izakaya is essentially the Japanese version of an Irish pub or American sports bar. Before the current unpleasantness began, they were seen as a booming industry in South Korea, hugely popular for casual dining and drinks with friends after work. 

CNBC on Wednesday saw Japan and South Korea tumbling into a full-blown trade war, with further escalation more likely than improved relations in the near term as mutual antagonism stretching back to World War II works itself out. 

Some analysts quoted by CNBC hoped South Korean and Japanese business interests would pull their respective governments back from further confrontation, although if South Korean retail outlets and restaurants are boycotting Japanese goods even more enthusiastically than their customers, it might take a little while for businessmen to find their voices.

The United States appears to be reluctantly entering the fray as a mediator, with Assistant Secretary of State David Stilwell promising on Wednesday that the U.S. will “do what it can do” to defuse the crisis.

Stilwell stressed it was up to Seoul and Tokyo to resolve their differences and hoped “that resolution will happen soon.”