Executives say the deal’s failure will raise “serious questions” about whether the company will remain at its longtime headquarters in Pittsburgh.
In Japan, the ruling Liberal Democratic Party will win the leadership race this month. to be the next prime ministerBiden’s plans to block the purchase have been described in the media as “unsupported and an affront to a close ally,” Kingston said.
Former Defense Minister Shigeru Ishiba, a front-runner in the LDP leadership race, told Reuters last week that the US comments on Nippon Steel were “very disturbing” and could “undermine the confidence of our allies”.
Another candidate, Digital Minister Taro Kono, said he “never imagined” the interception would raise national security concerns and would appeal to the White House if he became prime minister.
Rahm EmanuelThe US ambassador to Japan said that the relations between the countries are “deeper, richer and stronger than any trade transaction”.
Failure to acquire US Steel would be a major blow to the expansion plans of Japan’s largest steelmaker, Nippon Steel. It is focusing on investing in the US and India after exiting a nearly 50-year-old joint venture in China.
A spokesman for Nippon declined to comment reports Vice Chairman Takahiro Mori flew to Washington on Wednesday for talks with senior US officials.
The Japan Business Federation, the country’s largest business group, said companies are watching the U.S. review process with great interest, especially those considering investing in the United States.
“I hope this matter will not be affected by the US presidential election and that it will be resolved through a fair and just process,” the group’s chairman, Masakazu Tokura, told reporters in Tokyo on Monday.
A senior Japanese government spokesman declined to comment last week on reports that Biden would block the deal “as it relates to the management of an individual company.”
But spokesman Yoshimasa Hayashi added that expanding mutual investment between the United States and Japan and cooperation on economic security issues is “necessary for both sides.”
US and international business groups have also expressed concern about the politicization of the Nippon proposal and its potential impact on the US economy and workers. a letter Wednesday to the secretary of the treasury Janet YellenThe Global Business Alliance, an international trade association based in Washington, said foreign governments may be emboldened to retaliate against US companies seeking to invest abroad.
“If this kind of political interference prevails, America’s investment climate will be seriously damaged,” the group said in the letter, which was also signed by the US Chamber of Commerce and the Japan Business Federation.
Long Le, an associate professor at Santa Clara University’s Leavey School of Business, said Biden’s opposition to the deal marks a significant shift in U.S. policy on international trade, foreign direct investment and the extent to which the U.S. government is involved. industry.
The Committee on Foreign Investment in the United States, the arm of the U.S. Treasury that reviews the national security implications of foreign acquisitions of U.S. businesses, led by Yellen, has never blocked the Japanese acquisition, according to Le.
“He’s still defining what national security is,” Biden said in a phone interview. “And in this particular case, it makes clearer than ever that no foreign purchase can come from a sector deemed critical, even if it is from a US ally.”
Kingston said there is hope in Japan that this is not the final word on the deal.
“Maybe Japan Inc. is hoping that logic will prevail after the post-election dust clears,” he said.
Arata Yamamoto reported from Tokyo and Jennifer Jett reported from Hong Kong.