Japanese Prime Minister Shigeru Ishiba has formally urged U.S. President Joe Biden to approve Nippon Steel's (NISTF, Financials) $15 billion acquisition of U.S. Steel (X, Financials), highlighting the deal's importance to bilateral relations, according to sources familiar with the matter.
Biden has voiced opposition to the purchase, citing possible hazards to national security, along with a major U.S. labor organization. The Committee on Foreign Investment in the United States is reviewing the deal; next month it has a deadline to provide a recommendation before President-elect Donald Trump takes office on Jan. 20.
Government agency CFIUS, which evaluates foreign investments for security concerns, might accept the agreement with restrictions, prolong the assessment process, or suggest its rejection. The panel had already raised concerns about the vulnerability of the steel supply chain resulting from the proposed deal.
Emphasizing the geopolitical and financial advantages of the purchase, Ishiba stressed in a letter dated Nov. 20, the reflection of Japan's position as the biggest foreign investor in the United States. He noted that enhancing the economic cooperation fits the "unprecedented strength" of the Japan-U.S. relationship under Biden's leadership.
Nippon Steel has promised to invest in modern technologies and safeguard employment in line with American concerns. In the letter, Ishiba said, "The proposed acquisition will enable Japanese and U.S. steel companies to combine advanced technologies and increase competitiveness, and will contribute to enhancing steel production capacity and employment in the United States."
While Ishiba's office sent inquiries to the foreign ministry, which had no response, the U.S. Embassy in Japan refused to comment. Both Nippon Steel and U.S. Steel ignored calls for comments.
Under former Prime Minister Fumio Kishida, who separated his government from the agreement and presented it as a private commercial affair, this direct appeal marks a change from the posture taken by the Japanese government before.
Particularly in swing states crucial to the next U.S. presidential contest, the purchase has become politically contentious. As the next government gets ready to assume office, Biden's choice might influence opinions on foreign investment policy.
Following the election, CFIUS expanded its investigation to evaluate the deal's ramifications more fully. Ishiba has expressed worries about the possible consequences of a refusal of the purchase. The prime minister reportedly brought up the matter at his most recent meeting with Biden at an international forum, stressing its significance for Japan-U.S. economic ties.
