United States President Joe Biden rejected Japan’s Nippon Steel takeover deal with US steel, sparking animosity with the Japanese government.
Biden justified the rejection, citing national security and supply chain concerns. Trade Minister Yoji Muto, however, has labeled his decision ‘incomprehensible.’
The situation looks even worse between the two as the U.S. president’s staff revealed they had accidentally copied and pasted sections of a previous executive order on a Chinese crypto mining company on Nippon Steel’s directive.
Title errors are adding to the growing tensions between the US and Japan
U.S. President Joe Biden blocked Nippon’s takeover deal, despite concerns over a fallout with Japan. As expected, there’s growing tension between the countries as many begin to question how the U.S. treated one of its most vital allies.
Biden’s staff even disclosed that they had accidentally copied and inserted parts of an unrelated executive order into the Nippon Steel directive.
They inadvertently copied the title of a prior order regarding a Chinese cryptocurrency mining company that was forced to vacate property near an Air Force base, onto the block order. Some claim that the US now views Japan as a state adversary, more or less like China, and not a trusted partner
Biden had said that he had evidence to prove that Nippon Steel posed national security risks, saying he blocked the deal to protect the country’s supply chains and national security. Despite his claims, the Committee on Foreign Investment in the United States panel found no security risks associated with the Nippon deal. It seems the opposition stemmed from the U.S. Trade Representative.
Secretary of State Antony Blinken, Kurt Campbell, and Ambassador to Japan Rahm Emanuel had even asked Biden to rethink his stance.
Japan’s Prime Minister even commented:
It’s hard to fathom how an acquisition by a close ally could be considered a national security threat.
Shigeru Ishiba
US Steel and Nippon Steel are taking legal action against the US government
Both US Steel and Nippon Steel want to sue the US government. Tadashi Imai, President of Nippon Steel, contended that the company was entitled to a thorough review, accusing the U.S. government of failing to conduct one.
Additionally, US Steel’s president and CEO, David Burritt, referred to Biden’s decision as “shameful and corrupt.” His company, however, may eventually close if it fails to secure at least $2.7 billion in investment, which Nippon Steel had already agreed to in its proposed purchase.
The two companies claimed that Biden has “sacrificed the future” of American steelworkers for his own political gains and even cautioned that the move might affect US future trades and relations with its allies.
On Monday, the two companies filed a lawsuit against the US government. As it stands, Nippon Steel is still required to pay a $56 million breakup fee for the failed takeover.
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