Japan removed South Korea from its list of trusted trade partners, deepening a bitter row between the two countries.
The decision to strike South Korea off its so-called “white list” puts fresh trading restrictions on the country.
Seoul has said it will respond “sternly” to the “unfair” trade decision.
The trade spat has been fuelled by a diplomatic dispute over compensation for wartime labour.
Japan has said the measures are based on national security concerns, and address Seoul’s inadequate export controls.
The decision to remove South Korea from a so-called white list means that Japanese exports to South Korea now require additional screening to make sure they are not used for weapons and military applications. The new restrictions go into effect August 28.
South Korea was the only Asian country on the white list. Revoking its preferred status means the country will receive the same treatment as other Asian countries and territories, including Taiwan, Japan’s Chief Cabinet Secretary Yoshihide Suga said Friday.
South Korea is Japan’s third-largest trading partner, buying about $54 billion worth of Japanese goods.