Japanese PM Hopeful Criticizes U.S. Potential Block on Nippon Steel Deal, Warns of Strained Alliances
One of the leading candidates for Japan’s prime minister position expressed deep concern on Friday over the potential U.S. move to block Nippon Steel’s $15 billion acquisition of U.S. Steel. The candidate, Shigeru Ishiba, described the possible intervention by President Joe Biden as “very unsettling” and warned that it could undermine trust between Japan and its key ally, the United States.
Reuters reported on Wednesday that the White House is nearing a decision to block the takeover on national security grounds. A letter seen by Reuters indicated that the deal might negatively impact the supply of steel essential for critical U.S. projects and reduce the likelihood of U.S. Steel pursuing tariffs on foreign steel.
“I find what the United States is saying about Nippon Steel to be very unsettling,” Ishiba told Reuters. “Such actions could erode the trust between our nations. The recent tendency of the U.S. to impose deals and threats on its allies is troubling, not only with NATO countries but now Japan as well. It is crucial that these matters be discussed with sincerity, earnestness, and logic.”
Ishiba, a frontrunner in the race to lead Japan’s ruling Liberal Democratic Party and potentially become the next prime minister, voiced his concerns amid reports that Biden may block the deal. Another candidate for the position, Digital Minister Taro Kono, also expressed skepticism about government interference in corporate transactions.
Japan, a major U.S. ally and significant foreign investor, has been closely monitoring the situation. The proposed acquisition has faced bipartisan opposition in the U.S., with political figures and labor unions expressing concern over the impact on American jobs and trade.
U.S. Ambassador to Japan Rahm Emanuel refrained from commenting directly on the reports but emphasized that the U.S.-Japan relationship is “deeper, richer, and stronger than any single commercial transaction.” Japan’s Trade Minister Ken Saito echoed this sentiment, highlighting the strong economic ties between the two countries.
Analysts, however, worry that blocking the deal could strain U.S.-Japan relations. Marc Busch, a Faculty Fellow at Georgetown McDonough’s Baratta Center for Global Business, suggested that such a move might damage cooperation on national security and fuel perceptions of protectionism.
William Chou from the Hudson Institute noted that a veto could prompt Japan to reconsider its support for U.S.-led economic security initiatives, such as limiting China’s access to advanced semiconductors.
Japan’s largest business lobby, Keidanren, and the Japan-U.S. Business Council have both voiced concerns about the potential block, urging that the review process be conducted with fairness and integrity.
As the review continues, Japanese companies with interests in the U.S. are watching closely, hoping for a resolution that maintains strong bilateral relations.