Japan’s prime minister called for clarity Monday on why U.S. President Joe Biden blocked a $14.9-billion deal for Nippon Steel to buy US Steel, warning the decision could hit investments.
Biden’s announcement last week cited a strategic need to protect domestic industry, a move that drew sharp criticism from both companies and Tokyo.
“They need to be able to explain clearly why there is a national security concern, or else further discussions on the matter will not work,” Prime Minister Shigeru Ishiba told reporters.
A U.S. Government panel failed to reach consensus last month on whether the acquisition threatened national security—shifting the decision to Biden in the waning days of his presidency.
Ishiba said that the veteran Democrat’s decision had sparked concerns over future Japanese investments in the world’s largest economy.
“It is unfortunately true that there are concerns being raised within Japan’s industrial world over future Japan-U.S. Investment,” he said.
“It’s something we have to take seriously,” he said.
Japan and the United States are each other’s top foreign investors.
“It would be inappropriate for the Japanese government to comment on the management of an individual company that was under review as per U.S. Domestic law, so we will refrain from commenting, but we will strongly call on the U.S. Government to take steps to dispel these concerns,” said Ishiba.
‘Bold action’
Biden’s decision, less than three weeks before he leaves office, followed extended wrangling over competing domestic political, economic and trade demands.
The outgoing president—who made the rebuilding of the US manufacturing base a major goal of his administration—had criticised the deal for months, while holding off on a move that could hurt ties with Tokyo.
“This acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains,” Biden said in a statement on Friday.
“That is why I am taking action to block this deal.”
The United Steelworkers union quickly welcomed the announcement, describing it as “bold action to maintain a strong domestic steel industry”.
But Nippon Steel and U.S. Steel said the outcome reflected “a clear violation of due process and the law”.
Nippon Steel had touted the takeover as a lifeline for a U.S. Company that is long past its heyday, but opponents warned that the Japanese owners would slash jobs.
The decision to block the deal enjoyed rare bipartisan agreement in Washington.
Republican President-elect Donald Trump and incoming vice president JD Vance have also campaigned against the sale.
Japanese industry minister Yoji Muto has described Biden’s decision as “incomprehensible”.
