Every decade presents at least one occasion for a serious evaluation of the state of US-Japan economic relations. Bruce Aronson writes that the tortured course of Nippon Steel’s acquisition of U.S. Steel and highly unusual terms imposed by President Trump, together with the recent imposition of high tariffs on Japanese exports and renewed demands that Japan contribute more to the cost of stationing American troops, prompt such an evaluation now.
President Donald Trump’s proposal to allow Nippon Steel to invest in U.S. Steel could produce a genuine victory out of the embarrassing saga of the past year. Andrew McDermott, a long-term investor in Japan, says the key question in any new deal will be whether the terms allow Nippon Steel to deploy its management strengths and show Americans the path back to their manufacturing glory days. For this, we need to once again value real engineering over financial engineering.
President Joe Biden’s decision to block Nippon Steel’s proposed acquisition of U.S. Steel was criticized as a bid for union support in an election year. Based on information that has come out in subsequent litigation, we now know that the committee charged with reviewing the transaction did identify national security concerns that were rooted in factors unique to the global steel market and Nippon Steel.
The corporate strategy driving Nippon Steel’s acquisition of U.S. Steel has been to shake off the limits of its home market and grow as a global player. Masanori Bito and Masakazu Iwakura write as the deal closes that the transaction highlights new challenges faced by Japanese acquirers in the US that have not previously received much attention.
It is indisputable that President Biden’s order to block Nippon Steel’s acquisition of U.S. Steel undermined Japanese businesses’ confidence in the American investment review process. In the immediate wake of the order, Japanese corporate leaders voiced both disappointment and distrust. Hideaki Roy Umetsu and Kohei Takiguchi explain why Japanese investors may no longer perceive the US market as open or fair, and may hesitate to invest further.
