Blinken visits Japan as Nippon Steel decision weighs on relations From Reuters

By David Brunnstrom, Simon Lewis (JO:), Trevor Hunnicutt and Tim Kelly

WASHINGTON/TOKYO (Reuters) – U.S. President Joe Biden’s decision to block Nippon Steel’s $14.9 billion bid for U.S. Steel overshadowed Secretary of State Antony Blinken’s visit to Japan on Tuesday for farewell meetings with Washington’s most important ally in Asia.

The rejection, announced on Friday, undermined US efforts to strengthen ties just as the political crisis in neighboring South Korea potentially complicates a deeper trilateral relationship between Washington, Seoul and Tokyo formed to counter China’s growing military power.

On Monday, Japanese Prime Minister Shigeru Ishiba described Biden’s decision to block the sale of US Steel to Nippon Steel as “perplexing.”

While Japanese investment in the United States could also be cooled, analysts say that, given the two countries’ shared security concerns over China, any damage to their broader relationship will likely be limited in the political transition. in the United States where Donald Trump becomes president on January 20. .

MEETINGS

Accompanied by White House National Security Adviser Jake Sullivan, Blinken met with Japanese Foreign Minister Takeshi Iwaya in Tokyo followed by meetings with other senior Japanese officials, including Ishiba.

Seven trips to Japan in the last four years “is evidence not only of the importance, but of the centrality that the United States attaches to our partnership. President Biden asked me to come on this last trip to emphasize this Blinken told Iwaya.

“We have, between our two countries, a partnership that began to focus on bilateral issues, that worked on regional issues and that is now truly global,” he added.

Before his trip, the State Department said that Blinken wanted to build on the momentum of trilateral US-Japan-South Korea cooperation.

In Seoul on Monday, Blinken reaffirmed confidence in South Korea’s handling of its political turmoil as investigators sought to extend an arrest warrant for impeached President Yoon Suk Yeol.

Trump’s allies have also assured Seoul and Tokyo that they will support continued efforts to improve ties and advance military, economic and diplomatic cooperation to counter China and North Korea, Reuters reported before the re-election of Trump on November 5th.

TENSION, DAMAGES LIMITED BY NIPPON STEEL DECISION

Nippon Steel and US Steel filed a lawsuit Monday alleging that Biden violated the U.S. Constitution by blocking their $14.9 billion merger through what they called a national security sham. They asked the US federal court to overturn the decision.

Nicholas Szechenyi, a Japan expert at the Center for Strategic and International Studies in Washington, said Biden’s decision would make Blinken’s visit to Tokyo “embarrassing.”

However, “Japan will not let Nippon Steel’s decision poison the US-Japan relationship; it is too important to Japan’s national security,” he said.

After meeting Ishiba at his residence on Tuesday, Blinken did not respond to questions shouted by reporters about the potential impact of Biden’s decision in US Steel on bilateral ties.

They discussed security and economic ties, including the “importance” of Japanese investments in the United States, according to a Japanese government press release.

A Japanese diplomat told Reuters that Biden’s decision could chill foreign direct investment, but he hoped the close US-Japan relations would continue, with a strong emphasis on restoring the strong ties with Trump seen during his previous administration. and taking advantage of the increasingly hawkish mood. in Washington on China.

Business lobbies in Japan and the United States have pushed hard for the merger, supporting their arguments with warnings about the effect on the US-Japan relationship.

But the merger faced opposition from both Biden and Trump, who was assiduously wooed by Japan before his re-election.

Trump repeated after his election victory that he was “totally against” the merger and promised to block it as president and support US Steel with tax breaks and tariffs.

A senior Trump administration official told Reuters he believed Trump would have taken the same approach as Biden.

Marc Busch, a fellow at Georgetown University’s McDonough School of Business, predicts a “significant setback” for U.S. efforts to work with allies to create resilient supply chains in the face of Chinese dominance or competition in key sectors.

“Japan and other allies have doubts about investing in or aligning with politically sensitive US supply chains. China must be telling itself that it could never have hoped for a better outcome.”