President Moon Jae-in had some strong words to share regarding Japan's economic retaliations.
The South Korean President called on Japan to return to the negotiating table and said Tokyo's export curbs would only be an exercise in futility.
"South Korean firms will diversify their supply chain of necessary materials or localize production as they lose their confidence in partnering with Japan. I warn that the Japanese economy will suffer greater damage in the end."
Speaking at a weekly meeting with his top aides, the President said Japanese export curbs targeting local firms are posing a roadblock to the Korean economy at a time when it's looking to take the next step forward.
He said this rings especially true, given that semiconductors form the backbone of the Korean economy and its competitive advantages.
The President emphasized that Korea has overcome similar economic adversities in the past and would do so again with united public support.
Also pointing to Japan, the President blasted Tokyo's claims that Seoul had violated international sanctions by re-exporting banned goods to North Korea.
Moon said these allegations were a "grave challenge" to the South Korean government which has devoted all of its efforts toward peace on the Korean Peninsula within the framework of UN sanctions.
"Our government has a strong will to turn this into a blessing. The Korean government will do its best to reach a diplomatic resolution, but on the other hand, it will also provide economic support to Korean firms to confidently tackle this situation."
He also indicated that his administration is open to discussing alternative to its recent offer of setting up a joint fund by Korean and Japanese firms to compensate the victims of forced labor.
Moon added that the Korean government does not see this as the only solution, perhaps leaving the door open for a diplomatic solution.
"With both sides refusing to back down and with President Moon coming down hard on Japan, the two nations could find themselves at an important crossroads this Thursday Japan's deadline for third-party arbitration in the forced labor dispute, to which Korea had said it will not respond to."
Shin Se-min, Arirang News."