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The Asahi Shimbun
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THE ASAHI SHIMBUN
January 8, 2025 at 15:30 JST
Eiji Hashimoto, chairman and chief executive officer of Nippon Steel Corp., speaks at a news conference on Jan. 7. (Naoko Kawamura)
The U.S. government’s blocking of Nippon Steel Corp.’s acquisition of U.S. Steel sent shock waves through the Japanese business community and raised concerns that relations could deteriorate between the allies.
The two countries have been expanding free trade and cooperating in terms of security as the “greatest economic partners.”
But U.S. President Joe Biden on Jan. 3 issued an order to stop the deal, saying Nippon Steel “might take action that threatens to impair the national security of the United States.”
At a New Year’s celebration event held by three Japanese economic organizations on Jan. 7, several business leaders voiced indignation and confusion over Biden’s decision.
Masakazu Tokura, 74, chairman of Keidanren (Japan Business Federation), Japan’s largest business lobby, told reporters that the United States “is a country that has led free and open trade together.”
Tokura, who is also chairman of Sumitomo Chemical Co., added, “I am concerned that (Biden’s decision) may affect the Japan-U.S. relationship.”
Takeshi Niinami, chairman of Keizai Doyukai (Japan Association of Corporate Executives) who is also president of Suntory Holdings Ltd., called the U.S. government’s decision “very regrettable.”
Niinami expressed his support for Nippon Steel, which has filed a lawsuit against the U.S. government over the blockage.
“I hope (the company) will fight it out,” Niinami said.
Some in the Japanese steel industry are warning about the possible impact on future investment plans.
“There is no doubt that the U.S. is a promising market with growth potential,” an executive from a major steelmaker said. “(But) we need to consider our business strategy while keeping in mind the risk of retaliatory measures.”
U.S. Steel had agreed to Nippon Steel’s acquisition plan worth $14 billion (2 trillion yen). However, the influential United Steelworkers trade union opposed the deal.
Critics say Biden’s decision stems from his goal of winning support from the union during the presidential election last year.
“I don’t know if they were counting on votes, but I can’t believe they would listen to the labor union’s argument to that extent,” said Shiro Kondo, president of Fuji Electric Co.
While Kondo said he did not think Biden’s decision would affect Fuji Electric’s future investments in the United States, he added, “We have no choice but to respond on the assumption that various circumstances, such as politics and the economy, will change.”
Masanori Togawa, chairman of Daikin Industries Ltd., said the decision may change Japanese companies’ future thinking about the U.S. market.
Daikin has acquired more than 20 companies in the United States, including major air conditioning companies in the same industry.
“Acquisitions have been judged on the basis of growth strategies and synergy. In the future, we also need to consider whether there are security issues,” Togawa said.
Uncertainty is expected to further increase as Donald Trump, who has threatened to slap significant tariffs on imports from U.S. trading partners, returns to the White House on Jan. 20.
“Japan and the U.S. are allies, and it is important to work within that relationship,” Kei Uruma, president of Mitsubishi Electric Corp., said. “We don’t know what will happen with the issue of tariffs, but we will simply respond appropriately on a case-by-case basis.”
(This article was written by Kanako Tanaka, Ken Miyazaki, Kazuhito Suwa and Shinya Wake.)
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