Japan is reportedly considering taking an array of retaliatory measures if a dispute with South Korea over wartime labor worsens. They include raising tariffs, halting remittances and stopping visa issuances.

The Supreme Court in Seoul ordered Mitsubishi Heavy Industries in November to compensate Koreans conscripted for labor at the company during World War II, but the Japanese firm refused to pay. The victims have since filed suit with a Seoul court to confiscate the firm’s assets. The ruling came a month after Nippon Steel & Sumitomo Metal Corp. was found liable in a similar case.

It is reported that Japan’s Liberal Democratic Party is considering banning exports of hydrogen fluoride to Korea if the former Korean forced laborers repossess assets of Japanese companies. Hydrogen fluoride is a core chemical used in making semiconductors, one of Korea’s major exports.

In a similar vein, Japan has postponed its annual business meeting with Korea that was planned for May in Seoul until after September. Chairpersons of the Korea-Japan Economic Association and its Japanese counterpart, the Japan-Korea Economic Association, met recently and decided to put off the event.

The Japan-Korea Economic Association cited “chilly diplomatic relations” between the countries, and called on the Korean government to take “appropriate steps” to protect legitimate activities of Japanese firms.

The postponement is exceptional and concerning. The two associations have held the meeting in Japan and Korea alternately every year for five decades since 1969.

Korea-Japan conflicts over historical issues have been aggravated by incidents such as a Korean warship’s radar lock-on of a Japanese patrol plane and National Assembly Speaker Moon Hee-sang’s call for an apology from Japan’s emperor over wartime sexual slavery, in addition to the Supreme Court ruling. Now disputes are about to boil over into the economy.

Historical issues have raised tensions in the past, but Seoul and Tokyo have kept economic cooperation intact regardless. They have tried to keep economic issues separated from diplomatic issues. However, such efforts are now at risk of going up in smoke.

The governments of the countries need to cool down. They must try to de-escalate tension and prevent a catastrophe in their relations.

Japan may retaliate against Korea economically, but such a move would only boomerang, because Seoul would take corresponding measures. Losses on both sides would be inevitable. Their economies are intertwined with each other in the global trade network. Their bilateral trade amounted to $85.2 billion last year, according to the Korea International Trade Association.

The two countries ought to avoid provoking each other. Approaching historical issues from the point of view of current trade will only worsen the situation.

They must consider the past more sincerely. Japan says the 1965 treaty with Korea, which normalized ties and accompanied a payment of $300 million, settled all claims relating to its colonial control of the peninsula from 1910-1945. However, Japan is not right to say it is free from all obligations, moral and monetary, even for issues concerning former wartime sex slaves and forced laborers, some of whom are still alive and remain uncompensated.

Korea must try to ease tensions, too. It is imperative for it to maintain cooperation with Japan over security, among other sectors. Both countries face North Korean nuclear threats so they need to cope jointly with the threats. The Moon Jae-in administration must create an impetus to reduce tension and improve bilateral relations.

The Moon administration has tried to address wrongs of the past, including traces of the colonial period. However, when it comes to historical issues, it should be wary of moralism and chauvinism, which are apt to flare up unnecessary tensions and antagonism. Realism rather than moralism can prevent ties from worsening.

Letting discord fester does not benefit either side. Korea and Japan must act to prevent historical conflicts from spreading to the economy. They may consider, for example, a joint compensation fund raised by the two governments and companies on both sides.

They must not bury their economies in historical issues. They must move forward to a mutually beneficial future.