According to local media on Monday, Japanese Prime Minister Shigeru Ishiba informed US President Joe Biden that “strong” reservations have been voiced regarding his choice to thwart Nippon Steel’s acquisition of US Steel.
Biden annoyed one of Washington’s closest allies by canceling the $14.9 billion sale, citing national security concerns.
“I said that strong voices of concerns are being raised not just in Japan but also in the US business community, and I urged (Biden) to dispel these feelings,” Ishiba told reporters after a call with Biden and Philippines President Ferdinand Marcos on Monday.
Both firms have launched legal action, accusing the outgoing US president of “illegal interference”.
Despite its claims to the contrary, opponents worried that Nippon Steel would eliminate jobs. Nippon Steel had hailed the acquisition as a lifeline for US Steel.
Announced in 2023, the takeover proved to be a political hot spot in the lead-up to the US presidential election last year.
The deal was opposed by both Kamala Harris and Donald Trump, because US Steel is headquartered in Pennsylvania, a swing state.
According to official US figures, Japanese companies invested about $800 billion in the US in 2023, more than any other nation and accounting for 14.3 percent of the total.
US firms are also the biggest outside investors into Japan.
As Washington works to oppose China’s assertion of its presence in disputed regions of the South China Sea, Japan is also a key strategic ally.
Approximately 54,000 US military personnel are based in Japan, primarily on the island of Okinawa in the south.
The deadline for closing the takeover deal has been extended by US officials until June 18, according to statements made by both steel companies on Sunday.
Seeing the “big picture” of bilateral relations is crucial, according to Takeshi Iwaya, the foreign minister of Japan, who will be present for Trump’s inauguration as US president on January 20.
“It is important to appropriately deal with the issue while not undermining the big picture of the Japan-US alliance,” he said Sunday during a television debate.
“I will ask the US side to remove concerns which are spreading in the business community.”
Japan should diversify, according to industry organization Keizai Doyukai, since protectionism is expected to get stronger under Trump.
The nation “should 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,” it stated.
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