President Moon Jae-in held a meeting with heads of the country’s top 30 conglomerates on Wednesday to discuss Japan’s restrictions on exports of high-tech materials to South Korea.

The meeting held at Cheong Wa Dae -- the third of its kind since he took office in May 2017 -- came days after two top economic policymakers met with local business leaders to discuss ways to cope with Japan’s export curbs.

Last week, Japan tightened regulations on exports to Korea of three materials essential for the production of semiconductors and display panels.

Tokyo is expected to extend the scope of its export restrictions to increase pressure on Seoul to change its position on the issue of compensating Korean victims of wartime forced labor during Japan’s colonial rule.

Government officials have said they will gather opinions and closely coordinate with local businesses to minimize the potential damage caused by Tokyo’s move.

In fact, the Moon administration has been sitting idle, leaving local firms to bear the brunt of Tokyo’s retaliatory action against its inflexible handling of historical issues between both countries.

Some Korean business leaders, including Lee Jae-yong, vice chairman of Samsung Electronics, the world’s largest chipmaker, have sought to circumvent Tokyo’s export curbs through their personal connections with Japanese firms. Their efforts are set to go nowhere, as Japanese Prime Minister Shinzo Abe’s government is moving under a sophisticated plan mapped out to press Seoul to change its stance on historical disputes.

On Tuesday, Japan rebuffed a request made by Moon to retract its export restrictions and hold negotiations.

While saying Tokyo has no intention of lifting its export curbs and that the issue was not a matter for negotiations, Japanese Trade Minister Hiroshige Seko indicated working-level contacts might be considered, noting Seoul’s trade officials have been asking for confirmation regarding the toughened regulations.

Presiding over a meeting with his aides on Monday, Moon said his government would be left with no other choice but to take “necessary” action in case Korean firms face “actual losses.”

As many experts note, however, an escalation of tit-for-tat responses could inflict unendurable damage on Korea’s industries, including those that should serve as new growth engines.

The Moon administration is now tasked with working out a flexible compromise to settle the confrontation with Japan, beyond filing a complaint with the World Trade Organization, to prevent Tokyo from expanding its export restrictions to include other key items.

Equally important is that Moon and his aides should realize how local firms are struggling to survive under harsh global competition and rethink their anti-corporate policy framework.

A series of measures taken by the government over the past two years has dampened corporate activity and undermined industrial competitiveness.

It has increased corporate taxes, drawn up bills to weaken managerial stability and imposed excessive regulations on companies for safety and environmental protection reasons.

Its pro-labor stance has led militant unionized workers to stop factory operations and paralyze construction sites across the country. Its inflexible implementation of a shorter workweek has made research and development institutions turn off their lights early in the evening, holding back efforts to boost technological competitiveness.

Moon pledged all possible support for companies to help them bolster global competitiveness in the manufacturing sector by reducing their reliance on imports of core materials.

He hoped that corporations would expand technological development and investment and exert more endeavors to break from the externally dependent industrial structure.

His remarks sound hollow, given it would take many years and in many cases be economically unviable to break out of existing supply chains.

The administration should make a fundamental policy shift and take concrete measures to help bolster corporate activity and competitiveness.

It has to rein in excessive labor demands and dump its income-led growth drive, which has only increased the burden on companies.

The government should also facilitate cooperation with political parties to pass bills designed to accelerate regulatory reforms. It is deplorable that regulatory restrictions have hampered the domestic development and production of key materials used in semiconductors that are now subject to Japan’s export controls.

Moon has to cope with Abe’s attempt to use industrial leverage as a weapon to achieve his political aims. For this, he should take a moment to reflect on the course he has taken since assuming office.