SEOUL, South Korea — Eiji Hashimoto is getting his samurai on — riding into battle against both the outgoing and incoming U.S. presidents.
The chairman and CEO of Nippon Steel held a press conference in Tokyo Tuesday, the day after his firm, in a joint action with U.S. Steel, filed a lawsuit seeking to nullify President Joe Biden’s decision to block the Japanese firm’s planned $14.1 billion acquisition of the financially troubled U.S. firm last week. Mr. Biden cites what he said were national security concerns in blocking the sale of the iconic American steelmaker to a foreign rival.
Speaking to reporters, Mr. Hashimoto accused Mr. Biden of acting against the law in the final days of his presidency to stymie a deal that has been in the works since December 2023, overriding the findings of his own government to do so.
“A review of the deal by the Committee on Foreign Investment in the United States was not properly conducted due to President Biden’s illegal intervention,” Mr. Hashimoto said. “We can never accept this.”
Mr. Hashimoto added that the lawsuit, which aims to annul Mr. Biden’s ruling, will prove that the decision was not made on national security grounds, as claimed. That rationale is widely dismissed in Tokyo, a key U.S. ally in the region and host to more than 60,000 American troops at dozens of bases and other facilities across Japan.
Mr. Hashimoto has some heavyweight support for his critique of Mr. Biden’s decision.
Japanese leaders are generally reticent in criticizing their key ally, but in an unusual step, the country’s prime minister also spoke out on the matter Monday.
“It is unfortunately true that there are concerns being raised within Japan’s industrial world over future Japan-U.S. investment,” Prime Minister Shigeru Ishiba told reporters. “It’s something we have to take seriously.”
The decision was also harshly criticized in parts of the Japanese press.
“When is an ally not a partner? Apparently when a Japanese company seeks to purchase an iconic U.S. corporation,” The Japan Times said in an editorial this week, calling Mr. Biden’s move a “troubling snub” of an ally. “…Trust has been greatly damaged and it is unclear what will be required to undo the harm.”
The furor also coincided with a valedictory visit to Tokyo Tuesday by Secretary of State Antony Blinken. The soon-to-depart secretary of state met with Mr. Ishiba and Foreign Secretary Iwaya Takesi, but the readouts on the meetings from the State Department did not address the deal controversy and referred only obliquely to the importance of the bilateral economic relationship.
Big investors
Japan is the largest single foreign investor in the U.S. while the U.S. is the largest single investor in Japan.
Mr. Ishiba in his remarks said that the U.S. side must “be able to explain clearly why there is a national security concern” with a Japanese investment in a U.S. firm. “We will strongly call on the U.S. government to take steps to dispel these concerns.”
The Nippon Steel-U.S. Steel lawsuit accuses Mr. Biden of bowing to the United Steelworkers union, a key supporter of the Democratic Party, even though many rank-and-file members of the union — and a strong majority of U.S. Steel’s — reportedly favor the deal.
That suit has been filed in the US Court of Appeals for the District Court of Columbia. A separate suit has been filed in the District Court of Western Pennsylvania against U.S. steelmaker Cleveland-Cliffs Inc., which sought to acquire U.S. Steel, though at a lower price than Nippon offered.
The latter lawsuit alleges that Cleveland-Cliffs, together with the steelworkers’ union, has undertaken “a coordinated series of anti-competitive and racketeering activities illegally designed to prevent any party other than Cliffs from acquiring U. S. Steel as part of an illegal campaign to monopolize critical domestic steel markets.”
But for Japanese business executives and political leaders, there is no relief in sight from President-elect Donald Trump, Mr. Biden’s successor, who has said he would have blocked the merger as well and vows to impose new tariffs that would protect U.S. Steel from foreign rivals.
“Why would they want to sell U.S. Steel now when tariffs will make it a much more profitable and valuable company?” Mr. Trump wrote in a post on his social media site Truth Social. “Wouldn’t it be nice to have U.S. Steel, once the greatest company in the world, lead the charge toward greatness again?”
That suggests that Mr. Hashimoto now faces massive odds in getting a U.S. court to reverse Mr. Biden’s decision. Still, he put on a brave face.
“There is a chance we can still win,” he said. “We will never give up on growing our U.S. operations.”
Nippon Steel,on a website it created to promote the acquisition, wrote, “Nippon Steel and U. S. Steel remain confident that the transaction is the best path forward to secure the future of U. S. Steel – and we will vigorously defend our rights to achieve this objective.”
Some Tokyo-based analysts are warning that Nippon Steel will face a long-term expansion roadblock if it is unable to acquire U.S. Steel.
But others say that Nippon’s shares have not taken a serious dive due to both the massive price of the deal and to the fact that the political hurdles facing the deal had long been evident.
The Japanese have some U.S. allies, and U.S. Steel executives say they too will fight to save the deal, which they argue will bring needed investments and technological improvements while avoiding the need for immediate layoffs at the Pittsburgh-based company.
U.S. Steel President David Burritt wrote on the company’s website that Mr. Biden had “insulted Japan, a vital economic and national security ally, and put American competitiveness at risk. … The Chinese Communist Party leaders in Beijing are dancing in the streets.”
Writing on the Tokyo-based conservative news website Japan Forward, Grant Newsham, a retired U.S. Marine officer with extensive experience in the region, wrote that “Team Biden is doing so many strange things on its way out the door.”
Citing military competition between China and the U.S. across the Indo-Pacific region, he continued, “Telling Japan, ‘We want you to fight China with us but we don’t want you to own U.S. Steel’ won’t be well received in Tokyo.”
• Andrew Salmon can be reached at asalmon@washingtontimes.com.