Japan has expressed serious concerns about the potential U.S. decision to block Nippon Steel’s $15 billion acquisition of U.S. Steel, citing fears that it could undermine the trust between the two nations and set a dangerous precedent for future economic collaborations.
The White House is reportedly poised to reject the deal on national security grounds, a move that has ignited apprehension in Japan. Shigeru Ishiba, a prominent figure in Japanese politics and a leading contender for the position of Prime Minister, described the potential U.S. action as “very unsettling.” He cautioned that such intervention could erode the trust between allies, according to a Reuters report.
Taro Kono, another potential candidate for the Prime Minister role and the current Digital Minister, echoed Ishiba’s sentiments, arguing that governments should refrain from arbitrarily interfering in business transactions.
The proposed acquisition has faced bipartisan resistance in the U.S., partly due to the upcoming presidential election and the influence of powerful labor unions. The United Steelworkers union, a major player in the U.S. steel industry, opposes the takeover of Pennsylvania-based U.S. Steel, adding another layer of complexity to the situation.
Analysts fear that a veto of the deal could strain U.S.-Japan relations and have wider implications for future economic initiatives. Keidanren, Japan’s largest business lobby, has urged for a fair review process in the U.S.
The Biden administration has reportedly expressed concerns about potential national security risks posed by the acquisition, prompting criticism from the U.S. Steelworkers president, who accused U.S. Steel CEO David Burritt of failing to secure the union’s support. The union has called for revisions to the deal and even advocated for the replacement of the U.S. Steel CEO.
A top Japanese official has suggested that Biden’s anticipated veto of the deal is a calculated move aimed at winning over labor union voters in the upcoming election.
The potential impact of the U.S. decision has already been felt in the markets. U.S. Steel’s stock price rose by 2.60% during pre-market trading on Friday, while Nippon Steel’s shares closed 1.32% lower in the OTC market on Thursday.
