Japanese PM says blocking steel deal with US could affect investments

The Japanese prime minister on Monday urged Washington to allay concerns that a decision joe biden Blocking Nippon Steel’s acquisition of US Steel could affect future investments.

The US President’s announcement last week cited the strategic need to protect industrya measure that generated harsh criticism from both companies and Tokyo.

A US government panel failed to reach a consensus on whether the $14.9 billion acquisition threatened national security, shifting the decision to Biden in the final days of his presidency.

Prime Minister Shigeru Ishiba said the veteran Democrat’s decision had raised concerns about future Japanese investment in the world’s largest country. economy.

“Unfortunately, it is true that concerns are emerging in the Japanese industrial world about future investments between Japan and the United States,” Ishiba told reporters.

“It’s something we have to take seriously.”

Japan and the United States are respectively the main foreign investors.

“It would be inappropriate for the Japanese government to comment on the management of an individual company that was under review under US domestic law… but we will strongly ask the US government to take steps to allay these concerns.” Ishiba said. .

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“They need to be able to clearly explain why there is a national security concern, or else further discussions on the matter will not work,” he added.

“Bold action”

Nippon Steel reportedly plans to hold a press conference on Tuesday, when US Secretary of State Antony Blinken will also visit Japan following a trip to South Korea.

Biden’s decision came after a protracted dispute over competing domestic political, economic and trade demands.

The outgoing president, who made rebuilding the U.S. manufacturing base a major goal of his administration, had criticized the deal for months while delaying a move that could damage ties with Tokyo.

“This acquisition would place one of America’s largest steel producers under foreign control and create a risk to our national security and critical supply chains,” Biden said Friday.

The United Steelworkers union welcomed the announcement, describing it as “a bold move to maintain a strong domestic steel industry.”

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But Nippon Steel and US Steel said the result reflected “a clear violation of due process and the law” and Japan’s industry minister described it as “incomprehensible.”

Nippon Steel had touted the acquisition as a lifeline for an American company past its prime, but opponents warned that Japanese owners would slash jobs.

‘Chilling effect’

The decision to block the deal enjoyed rare bipartisan agreement. Republican President-elect Donald Trump and his incoming vice president had also campaigned against the sale.

But the U.S. Chamber of Commerce noted that the investment from the country’s “important and trusted ally,” Japan, supports nearly one million American jobs.

“The decision could also have a chilling effect on international investment in the United States,” he warned.

Even without the US Steel acquisition, Nippon Steel should be able to meet its annual production targets in the medium term, said SBI Securities analyst Ryunosuke Shibata.

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“Nippon Steel may have other opportunities in the future to buy an American company” or invest in the United States to have a production base there, Shibata told AFP.

“There will be no significant change in Nippon Steel’s growth strategy of investing in the United States and continuing to increase production capacity in India.”

Keizai Doyukai, one of Japan’s three major business groups, noted that protectionist trade policies are likely to increase under the Trump administration.

“In areas related to economic security, we must strengthen cooperation with like-minded countries such as South Korea, Australia, the Philippines and India, so as not to become completely dependent on the United States,” he said.

Source: AFP