Xinhua News Agency, Tokyo, January 4 Summary｜Many parties in Japan criticized the United States for politicizing the Japan Steel Corporation’s acquisition of U.S. Steel and its negative impact
Xinhua News Agency reporter Liu Chunyan Ouyang Dina
The White House issued a statement on the 3rd that U.S. President Biden formally blocked Japan Steel Corporation from acquiring U.S. Steel Corporation. In this regard, many parties in Japan pointed out that Nippon Steel’s acquisition of U.S. Steel has been politicized by the United States. The Biden administration has placed political considerations above economic logic, which will have negative consequences for the U.S. steel industry and will have widespread adverse effects.
In December 2023, Japan Steel announced plans to acquire U.S. Steel for $14.9 billion. U.S. Steel convened an extraordinary general meeting of shareholders in April 2024 and approved Nippon Steel’s acquisition plan. However, the acquisition was strongly opposed by the United Steelworkers Union and the Democratic and Republican parties. The Committee on Foreign Investment in the United States, which is in charge of foreign investment review, has been reviewing the acquisition for several months on the grounds of “national security”.
The Committee on Foreign Investment in the United States previously stated that production capacity of U.S. Steel may be reduced after the acquisition, thus posing security risks to the United States. To this end, Japan Steel has submitted a supplementary proposal to the U.S. government, promising not to reduce U.S. steel production capacity within 10 years. If there is a possibility of a reduction in production capacity in the future, the U.S. government can exercise veto power.
After Biden made the decision to block the acquisition, Nippon Steel and U.S. Steel issued a joint statement on their official website on the 4th, stating that Biden’s decision was based on political considerations. Nippon Steel and U.S. Steel were disappointed with this and would take all measures. Protect your legal rights.
Japanese Minister of Economy, Trade and Industry Yoshiharu Muto expressed regret that the US government blocked the acquisition. He said it was incomprehensible that the United States would make such a decision “based on national security concerns.” Concerns among the Japanese industry are rising, and the Japanese government will take it seriously.
“Nihon Keizai Shimbun” reported that this is the first time that a US president has ordered to block an acquisition by a Japanese company. Japan’s Jiji News Agency reported that it is rare for companies from allied countries to prevent acquisitions by companies from allied countries on the grounds of “security concerns” and will have a negative impact on Japan-US relations and Japanese companies’ investment in the United States.
Tetsuo Kotani, a professor at Meikai University in Japan, believes that Japan is an ally of the United States and that the U.S. government’s use of security risks is a complete excuse. Biden blocked the takeover with an eye on the midterm elections and the next presidential election. Between saving U.S. steel and preserving the future of the Democratic Party, Biden finally decided to prioritize the interests of the Democratic Party.
Hiroshi Watanabe, senior economist at Sony Financial Group, believes that the U.S. government’s blocking of the acquisition may force Japan Steel to reconsider its business strategy, and U.S. Steel will accelerate its decline without improving production efficiency. At the same time, the U.S. steel industry may lose a large number of jobs, and foreign companies will become more cautious when investing in the United States.
Taku Imamura, director of Japan’s Marubeni Economic Research Institute, said that the current demand for U.S. steel is strong. After Biden announced that he would block the acquisition, if U.S. Steel decides to close the blast furnace, neither the U.S. government nor the United Steel Workers Union can stop it. U.S. steel production capacity will decline and the U.S. The decline of the steel industry will be inevitable.
U.S. Steel CEO David Burritt said in September 2024 that if the acquisition fails, U.S. Steel may close its headquarters and factory in Pittsburgh, Pennsylvania, which may endanger thousands of jobs, and may also move the headquarters. U.S.
Shigehiko Takatsuji, an associate professor at the Department of Business Administration at Mejiro University in Japan, believes that it is difficult to overturn the U.S. government’s decision by relying solely on the efforts of one Japanese company. How the Japanese government puts pressure on the U.S. government next will be the focus of attention from all parties.
According to Japan’s Kyodo News Agency, relevant figures from Japan Railways and the Japanese government still have expectations for the next U.S. President Trump. Some analysts believe that Trump has more room for negotiation than Biden. However, even if Trump revise Biden’s decision, he may also ask Japan to make concessions in other areas.
[Editor in charge: Yan Yujie]
