South Korea's bread-and-butter semiconductor exports will be first domino to fall, and it could be followed by many others if Japan widens its export curbs.
Future growth in the country's semiconductor industry will be seriously compromised, as key components and materials needed for research and development can no longer be sourced from Japan.
The next target is the country's hydrogen vehicle sector, which Korea sees as an important source of future growth.
Japan has in fact, already warned that it could include machine tools and carbon fiber in its restriction list, which are critical components in producing hydrogen cars and fuel tanks.
"Korea is also a major automobiles, we're also trying to break into the hydrogen power market. The popular opinion is that the next industries Japan will hit if Japan decides to expand restrictions is Korea's automobile market because we are competitors to Japanese automakers."
Japan's economic pressure will also disrupt the global value chain, slowing the global economy, especially China's.
"China makes finished products with Korean semiconductors. If China, which is considered the number one global manufacturer, fails to produce advanced electronic goods, global supply will dramatically decrease. That is also bad news for consumers across the globe."
The 1973 oil crisis was another political dispute which turned into a full-scale economic retaliation, and it weighed heavily on global economic growth, which fell from 7 percent to around 2 percent in 1973.
Experts do say however, that Tokyo's export curbs will have more of a long-term economic effect, and not likely to result in an acute crisis in the short-run.
This, especially as South Korean firms are exploring all possible means to cushion itself from the impact of Japan's possible expansion of export restrictions.
However, industry watchers are voicing their concerns, that if Tokyo dials up the economic pressure, the impact might be felt earlier, in the second or third quarter of the next year.
KIM Da-mi, Arirang News.