TOKYO/SEOUL: Japan and South Korea raised the stakes on Tuesday in a dispute that threatens to disrupt global supplies of smartphones and chips. South Korea denounced the Japanese reports that the former had transferred a sensitive chemical to North Korea. At the root of the diplomatic row between the two U.S. allies is compensation demanded by Seoul for South Koreans forced to work for Japanese firms during World War Two.

It worsened last week when Japan said it would tighten curbs on exports of three materials crucial for advanced consumer electronics because trust with South Korea had been broken over the forced labor dispute. The restrictions on exports of the material to South Korea could hit tech giants, such as Samsung Electronics Co Ltd and SK Hynix Inc that supply chips to the likes of Apple Inc and Huawei Technologies Co Ltd.  It also underscores Japan’s grip on a vital link in the global supply chain that Prime Minister Shinzo Abe’s government is using as leverage, days before a parliamentary election.

The United States has been dismayed by the dispute and its new senior diplomat for East Asia, David Stilwell, will visit both countries on his first trip to the region this month. A spokeswoman for the U.S. State Department said it was “critical to ensure strong and close relationships between and among our three countries in the face of shared regional challenges” including that posed by North Korea. (Agencies)