US Decision to Block Nippon Steel-U.S. Steel Deal: Unjust Political Interference, Ishiba Says

The decision by the U.S. government to block the proposed acquisition of U.S. Steel by Japan's Nippon Steel has drawn criticism from Japanese Prime Minister Shigeru Ishiba, who characterized the move as "unjust political interference." In a statement released on January 3, 2025, Ishiba expressed his disappointment with the U.S. decision, arguing that it was driven by political considerations rather than genuine national security concerns.



The proposed investment plan by Nippon Steel aimed to address national security concerns raised by the U.S. government by implementing various mitigation measures. These measures included maintaining U.S. control over key positions, prohibiting the transfer of production and jobs outside the U.S., and ensuring that production capacity would not be reduced without approval from CFIUS. However, these mitigation measures were not considered sufficient by the Committee on Foreign Investment in the United States (CFIUS), leading to President Biden's decision to block the acquisition.

Ishiba's criticism of the U.S. decision highlights several factors that contributed to his characterization of the move as unjust political interference:

1. Lack of evidence of national security risk: Ishiba argued that there was no credible evidence presented by the U.S. government to support the claim that the acquisition posed a national security risk. He stated, "The President’s statement and Order do not present any credible evidence of a national security issue, making clear that this was a political decision" (Source: January 3, 2025, statement by Nippon Steel and U.S. Steel).
2. Political manipulation of the process: Ishiba alleged that the process was manipulated to advance President Biden's political agenda, rather than being driven by national security concerns. He said, "Instead of abiding by the law, the process was manipulated to advance President Biden’s political agenda" (Source: January 3, 2025, statement by Nippon Steel and U.S. Steel).
3. Pre-determined outcome: Ishiba claimed that the outcome of the CFIUS review was pre-determined, without an investigation on the merits, to satisfy the political objectives of the Biden White House. He stated, "It is clear that the CFIUS process was deeply corrupted by politics, and the outcome was pre-determined, without an investigation on the merits, but to satisfy the political objectives of the Biden White House" (Source: January 3, 2025, statement by Nippon Steel and U.S. Steel).
4. Treatment of an ally: Ishiba pointed out that the U.S. government's decision to reject a procompetitive transaction that advances U.S. interests and treats an ally like Japan in this way sends a chilling message to any company based in a U.S. allied country contemplating significant investment in the United States. He said, "Unfortunately, it sends a chilling message to any company based in a U.S. allied country contemplating significant investment in the United States" (Source: January 3, 2025, statement by Nippon Steel and U.S. Steel).

These factors align with the stated national security concerns in that they highlight the political nature of the decision and the lack of evidence supporting the claim that the acquisition posed a national security risk. However, they also suggest that the process was manipulated for political reasons, rather than being driven by genuine national security concerns.

In conclusion, the U.S. decision to block the acquisition of U.S. Steel by Nippon Steel has been criticized by Japanese Prime Minister Shigeru Ishiba, who characterized the move as "unjust political interference." The proposed investment plan by Nippon Steel aimed to address national security concerns raised by the U.S. government, but these mitigation measures were not considered sufficient by CFIUS. The political nature of the decision, lack of evidence supporting national security concerns, and the treatment of an ally have all contributed to the criticism of the U.S. government's decision.