Japanese Prime Minister Shigeru Ishiba expressed on Sunday (February 9th) that he hopes to reach an agreement to ensure that U.S. Steel maintains its status as an “American company.” This is in response to concerns raised by U.S. President Trump regarding the acquisition of the company by Nippon Steel.
During a meeting with President Trump in Washington D.C. last Friday, Ishiba reiterated Trump’s opposition to Nippon Steel’s acquisition of U.S. Steel, stating that “such a concept is psychologically not good.”
In an interview with Nikkei Asia, Ishiba mentioned, “U.S. Steel will continue to be an American company.” He acknowledged the concerns of Americans about a prominent American company being acquired by a foreign entity, emphasizing that any deal will not just be a simple acquisition but rather an investment.
He believes that this transaction is not merely a merger and acquisition but an investment arrangement. Ishiba hopes to reach an agreement where Nippon Steel provides technology to enhance the product quality of U.S. Steel while ensuring that most management positions and employees are held by Americans.
Ishiba emphasized that he explained to President Trump that the key to this deal lies in how it benefits both the U.S. and Japan, promoting American industry and security.
President Trump plans to meet with the CEO of Nippon Steel this week, and one of the key negotiation topics will be the potential stake that Nippon Steel may hold in U.S. Steel.
Regarding this, Ishiba stated, “The ownership percentage Nippon Steel may hold is a commercial issue, and the government should not comment on it.”
However, he admitted that the Japanese government is assisting Nippon Steel and hopes that this meeting will yield positive results.
In December 2023, Nippon Steel announced a $14.9 billion acquisition of U.S. Steel, aiming to revive the once-flourishing American steel company. However, this deal faced strong opposition from U.S. labor unions and became a crucial issue in the 2024 U.S. presidential election.
Last month, former President Biden officially blocked the acquisition on grounds of national security, prompting Nippon Steel to file a lawsuit against the Biden administration, accusing it of “illegal interference,” and seeking a rehearing of the acquisition case.
In response to U.S. concerns, Nippon Steel has pledged that the majority of the board members of U.S. Steel, including three independent directors, key positions such as the CEO and CFO, will be held by American citizens.
President Trump announced on Friday his plan to impose reciprocal tariffs as soon as Monday to equalize U.S. import tariffs with those on U.S. exports in other countries.
In response, Ishiba stated, “The U.S. will not rule out any options,” hinting at possible tariff adjustments for Japan, particularly on items protected by the Japanese government such as agricultural products. However, he emphasized that different products have different tariff rates, making the issue quite complex, with detailed discussions pending at the summit.
Japan is a country with limited land and agricultural resources. To protect domestic agriculture and maintain food self-sufficiency, authorities have long implemented tariff protection measures on certain agricultural products. While these measures have somewhat protected domestic agriculture and sustained food self-sufficiency, they have also led to higher prices for Japanese agricultural products, raising consumer costs.
President Trump aims to address the U.S. trade deficit as quickly as possible, reaching a historic high of $1.2 trillion in 2024. Compared to trade deficits with China, Mexico, and Vietnam, the deficit with Japan is relatively smaller.
Ishiba stressed that trade between the U.S. and Japan is mutually beneficial, with many Japanese companies reinvesting profits back into the U.S., significantly reducing the proportion of the U.S. trade deficit with Japan.
During the summit, Ishiba proposed the idea of increasing the import of natural gas from Alaska to Japan. This not only aids in diversifying Japan’s energy supply and enhancing energy security but also helps reduce the U.S.-Japan trade deficit.
Washington hopes for Japan’s involvement in natural gas development in Alaska’s Arctic region, with the U.S. aiming to build a long-distance pipeline across Alaska to transport natural gas from the U.S. Pacific coast to Asian markets. However, the specifics of Japan’s involvement in the project and purchase prices are yet to be finalized.
On another note, President Trump welcomed Japan’s commitment to increasing defense spending by 56% by fiscal year 2027.
Although there are concerns in Japan’s defense industry about importing American weapons affecting domestic industries, Ishiba believes that Japan can acquire U.S. drones and advanced missile interception systems to address security vulnerabilities against threats from China, Russia, and North Korea.
Ishiba emphasized that defense budget adjustments will be based on future security environments, not solely dictated by U.S. pressure.