My Take | Cooperative Tokyo finds America a demanding, but ungrateful boss
After doing everything to please Washington with its China containment, Japan is not allowed to buy US Steel that has been in decline for decades
It’s ironic to call it “Bidenomics”. By trying to disrupt Chinese tech development and pressuring reluctant allies and their companies not to sell specific products and services deemed important to “US national security”, the White House of retiring President Joe Biden has been more anti-economic than economic. Or perhaps it’s just bad economics. And not even good politics.
Take the century-old US Steel. Originally the love child of J.P. Morgan and Andrew Carnegie, it was the Apple and Google of its day and the world’s first billion-dollar company. In recent decades though, it has fallen on hard times as a sorry symbol of America’s once-fabled manufacturing might. Now, with a market capitalisation of no more than US$7.5 billion, it’s just another mid-cap.
So, when the Japanese offer to buy it, you would think the Americans would jump at it from a trusted ally. Long-suffering shareholders have been more than happy to have it taken off their hands. But no, Biden won’t let it – on national security grounds, what else? And in their latest debate, both Kamala Harris and Donald Trump said they wouldn’t let the sale proceed as the next president. Poor Japan.
By bending over backwards to placate Washington, even to the extent of compromising its own economic and national security – most noticeably in the banned sales of advanced computer chips to China, this is what Japan gets in return.
No wonder the Japanese are angry. One of the country’s more popular politicians, Shigeru Ishiba, is running to become the leader of the country’s ruling Liberal Democratic Party, and so the next prime minister. He certainly doesn’t mince words. “I find what the United States is saying [about Nippon Steel] to be very unsettling, making such statements or actions that could undermine the trust of its allies,” the 67-year-old former defence minister was reported as saying.
“Recently the US is tending to impose deals and threats even on its allies, this is true not only with Nato countries but also now with Japan. I question whether that is really a fair approach. It is extremely important for the Japanese government to discuss these matters sincerely, earnestly, and logically.”
There is a simple reason. Nippon Steel has the misfortune of choosing an election year to make the deal. Pennsylvania is a swing state. It went to Trump in 2016 but to Biden in 2020. US Steel is headquartered in the state and its powerful United Steelworkers union has rejected the US$14 billion deal.