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Japan is considering raising tariffs on some South Korean products in response to the seizure and possible sale of assets from two Japanese companies that were sued over the issue of wartime labor, sources said Saturday.

If the assets are sold, Tokyo will take steps to inflict a corresponding amount of losses on the South Korean economy, according to the sources.

At a Diet meeting Friday, Foreign Minister Taro Kono said Tokyo would launch such measures if Japanese companies suffer.

If Japan actually triggers the countermeasures, its relations with South Korea look certain to deteriorate further.

Tokyo has been calling on Seoul to hold talks based on a 1965 bilateral pact on war-related claims to address the South Korean court rulings that ordered Nippon Steel & Sumitomo Metal Corp. and Mitsubishi Heavy Industries Ltd. to pay compensation to South Korean plaintiffs over wartime labor.

But Seoul has shown no signs of accepting Tokyo’s request.

Japan has already listed about 100 items for possible retaliatory action, sources said. Those actions may include tariff hikes, a suspension in the supply of some Japanese products and restrictions on visa issuance.

Tokyo is expected to decide a course of action after assessing whether the measures meet World Trade Organization rules and how much impact they would have on the Japanese economy, the sources said.

Japan is also considering a plan to ask South Korea to establish an arbitration committee, which could include members from third countries, to discuss the wartime labor issues.

South Korea’s Supreme Court last year rejected appeals by the two companies against lower court rulings that ordered them to pay the compensation.

A South Korean court has already approved the seizure of assets held in South Korea by Nippon Steel. A similar process to seize Mitsubishi Heavy assets is under way.

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