Middle East conflict impacts global trade: Japan and South Korea's used car exports fall into trouble

Since the United States, along with allies, launched military strikes against Iran, and the situation in the Middle East has completely spiraled out of control, the Strait of Hormuz has been nearly closed, and global key shipping routes have been thoroughly disrupted. The impact of this blocked critical waterway continues to spill over. Japan and South Korea, the two major global used car exporters, are caught in multiple difficulties, including cargo delays, shipping interruptions, and soaring costs. The global used car trade supply chain has been severely impacted. According to the latest data, the total used car export value of Japan and South Korea last year reached as high as 19 billion USD. More than half of Japan's exports went to the Middle East, with the UAE being Japan's largest used car export destination. One-third of South Korea's used car exports went to the Middle East last year. This shipping interruption has directly cut off key trade channels, putting exporters under multiple pressures such as rising freight costs, cargo delays, capital occupation, and customer loss, with no effective solutions currently in sight.

The collective obstruction of the Japan-South Korea used car export industry this time is primarily a direct manifestation of the combined effects of the escalation of the Middle East conflict, blocked shipping channels, and global supply chain disruption. The Strait of Hormuz, a core shipping bottleneck connecting the Middle East to the world, is completely blocked, directly causing cargo to be stranded at sea. In addition, shipping companies, in order to avoid the risks of military conflict, have successively canceled scheduled routes and suspended transport services to the Middle East, further disrupting the transportation plans of used car exporters. At the same time, the Japan-South Korea used car export industry is highly concentrated in structure, and the market's singularity results in weak risk resistance. Coupled with a surge in international oil prices raising shipping costs, this makes it impossible to quickly find alternative markets with sufficient capacity to handle accumulated cargo after the core route is blocked. The problems of cargo backlog and capital occupation have been further amplified, and this dual pressure makes it very difficult for small and medium-sized exporters to cope. Moreover, the Japan-South Korea used car export industry is dominated by micro, small, and medium-sized enterprises with very poor risk resistance; long-term business interruptions will lead to a large number of business closures, industry reshuffling, significant declines in practitioners' income, and impacts on employment.

Facing the continuously worsening operational difficulties, it is necessary for multiple parties to work together to implement diversified measures to relieve pressure and reduce losses. For exports, priority should be given to coordinating with shipping companies to finalize alternative routes, choosing to bypass non-conflict area sea lanes, ensuring the transportation of core goods, optimizing cargo layout to reduce accumulation, strictly controlling cost expenditures to cut unnecessary operating expenses, and negotiating with customers to delay deliveries or adjust delivery plans to maintain long-term cooperation. At the same time, opening bypass routes through the Strait of Hormuz, reasonably adjusting transportation prices, avoiding maliciously raising deposits and freight, and sharing risks with exporters are important. In terms of ports, the efficiency of clearing backlogged cargo should be accelerated, turnaround speed improved, and port congestion alleviated. Additionally, targeted support policies should be promptly introduced to provide small and medium-sized exporters with interest subsidies and storage subsidies to ease cash flow pressure, while promoting coordination in international shipping to ensure the safety of civil trade routes.

In conclusion, the conflicts in the Middle East and the disruption of shipping through the Strait of Hormuz have thrown the previously stable used car trade industry into a full-scale crisis, fully demonstrating the powerful destructive impact of geopolitical conflicts on global niche trade sectors. This shock not only affects the annual trade data of Japan and South Korea but also disrupts the global supply and demand balance of used cars. There is a shortage of essential vehicles in the Middle East, and the survival of small and medium-sized businesses is precarious. Only with a easing of the geopolitical situation, the reopening of key shipping routes, along with exporters flexibly adjusting their arrangements and policy support, can the trade chain be gradually restored, helping the industry emerge from the crisis and return to a normal development trajectory.