Japan resolved on Friday to remove South Korea from a “whitelist” of 27 countries that receive preferential trade treatment.

Japanese Prime Minister Shinzo Abe convened a Cabinet meeting the same day to decide whether to revise the Export Trade Control Order and remove Korea from its list of trusted trading partners.

The revised order will be signed by Minister of Economy, Trade and Industry Hiroshige Seko and co-signed by Abe. Seko said the revision would take effect Aug. 28.

As of that date, Japanese exporters will require government approval each time they export a shipment of strategic items to Korea. The strategic items category comprises 1,115 parts and materials that could possibly be used to develop weapons.

Immediately after the Cabinet decided to exclude Korea, Seko addressed reporters’ questions about the potential negative impact of the export restrictions on Japanese firms.

“I believe this measure will not basically affect Japanese companies. But, if so, Japan should set up supply chains with Taiwan and ASEAN nations (to mitigate the damage),” Yonhap quoted him as saying. ASEAN refers to the Association of Southeast Asian Nations.

Korea’s presidential office expressed “deep regret” Friday over Japan’s decision to impose additional export restrictions against Korea.

President Moon Jae-in is scheduled to hold an emergency Cabinet meeting at 2 p.m. to discuss interagency strategies. Following the meeting, Finance Minister Hong Nam-ki will announce a comprehensive response plan.

This is the second step Tokyo has taken in what is widely seen as retaliation for recent Korean Supreme Court decisions holding Japanese companies liable for having taken advantage of forced labor during World War II. On July 4, Japan restricted exports to Korea of three high-tech materials crucial to the production of chips and display panels.

Korea is recognized as having an advanced export control system and until now has enjoyed preferential treatment from Japan for the purpose of customs clearance. It is the first country to be removed from the list.

By Shin Ji-hye (shinjh@heraldcorp.com)