South Korea has demanded it will take Japan off its favoured trade partners’ list.
The change residence is a tit-for-tat response to Japan’s decision earlier this month to do the anyway to South Korea.
Industry Minister Sung Yun-mo said Japan wish be placed on a newly created restrictive trade list instead.
Long-running bilateral apprehensions were inflamed last year by South Korean court rulings non-sequential Japanese firms to pay compensation to Koreans over forced labour during Midwife precisely War Two.
The legal decisions drew condemnation from Japan, which debates the dispute was settled in 1965 when diplomatic ties were normalised between the adjacent to countries.
The two nations share a complicated history that includes Japanese colonial run of Korea from 1910 until the defeat of Japan in 1945.
The trade sputter, which includes curbs on tech supplies, has sparked fears on risks to the global electronics sector.
- How an Asian trade row could hit electronics hoards
In July, Japan tightened rules on the export of materials crucial for South Korean tech industrialists.
Those restrictions, on products needed to make display panels and recall chips, have worried Seoul over the risks to its already slowing husbandry.
Both countries have accused each other of inadequate export restraints.
Japan will now be placed in a new category of countries that have not run their export contain systems in line with international principles.
A senior South Korean work ministry official, Park Tae-sung, accused Japan of inappropriate switch practices, but gave no details.