The recent proposal by Japanese steel giant Nippon Steel to acquire America’s U.S. Steel has garnered concern among lawmakers about foreign acquisition of U.S. companies. But according to one expert, the move signifies a strategic alignment between the United States and Japan to counterbalance the influence of communist China.
The proposed acquisition, currently under review by the U.S. government, has prompted many in Washington to move to block the deal, citing concerns over national security and economic implications.
Anders Corr, publisher of the Journal of Political Risk and Principal at Corr Analytics, has told NTD that, from an economic perspective, Japan is important to the United States strategically, because the two countries are “in this together against China.”
Corr said Japan is heavily reliant on the United States for its national security, making it highly unlikely Japan would move to harm U.S. interests. “For example, to hurt U.S. national security would ultimately hurt Japanese national security,” Corr noted.
Since the two nations stand together against the West’s biggest communist adversary, Corr said, “There’s no reason for us to look a gift horse in the mouth, essentially.”
Corr also said that Nippon’s promise to invest $2.7 billion in modernizing U.S. Steel plants is a significant benefit for America.
“It’s going to make the two companies much stronger,” he said, noting that more investment would create jobs in the United States and generate “a lot more revenue.”
He added that the United States isn’t just competing with China but also with cheaper steel from India, though China is more critical because it’s a major adversary of the United States.
Despite the United States’ history of resisting Japanese investment, like in the auto industry, Corr believes this merger is a good deal and has gained local support. “The local steelworkers’ union in Pittsburgh supports it because they know there’s going to be more jobs, more investment, and also the business community in the United States supports it.”
Corr also mentioned that ongoing negotiations between the United States and Japan on other issues might be influencing the steel deal.
China wants to import Japanese semiconductors and related equipment, while “the United States obviously does not want that stuff going to China,” Corr said. He said that information leaked recently indicated the two allies are nearing a deal involving Japan not exporting to China.
“Probably that deal is linked to the steel deal,” he added.