Ishiba tells Biden of ‘strong’ concerns over blocked steel deal

TOKYO: Japanese Prime Minister Shigeru Ishiba told US President Joe Biden that “strong” concerns have been raised over his decision to block Nippon Steel’s takeover of US Steel, local media reported Monday.

Citing national security concerns, Biden put a stop to the US$14.9 billion sale and irked one of Washington’s closest allies.

“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”.

Nippon Steel had touted the acquisition as a lifeline for US Steel, but opponents warned the Japanese giant would slash jobs – despite its assurances to the contrary.

The takeover, which was announced in 2023, came in the run-up to last year’s US presidential election and proved a political flashpoint.

US Steel is based in the swing state of Pennsylvania and both Donald Trump and Kamala Harris opposed the transaction.

Japanese firms invested almost US$800 billion in the US in 2023, more than any other country and 14.3% of the total, according to official US data.

US firms are also the biggest outside investors into Japan.

Japan is also a close strategic ally for Washington as it seeks to counter China asserting its presence in contested areas of the South China Sea.

The US has about 54,000 military personnel stationed in Japan, mostly on the southern island of Okinawa.

Both steel companies said Sunday that US authorities have extended the deadline for unwinding the acquisition deal until June 18.

Japan’s foreign minister Takeshi Iwaya, who will attend Trump’s inauguration as US president on Jan 20, said it was important to see the “big picture” of bilateral ties.

“It is important to appropriately deal with the issue while not undermining the big picture of the Japan-US alliance,” he said on Sunday during a television debate.

“I will ask the US side to remove concerns that are spreading in the business community.”

Japanese business group Keizai Doyukai said that with protectionism likely to strengthen under Trump and Japan should diversify.

Japan “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 US,” it said.