When is an ally not a partner? Apparently, when a Japanese company seeks to purchase an iconic U.S. corporation. There is little explanation other than raw politics and naked nationalism for the looming refusal of the U.S. government to approve Nippon Steel’s proposed takeover of U.S. Steel.
The failure of the Committee on Foreign Investment in the United States (CFIUS) to reach a consensus on the security risks posed by the purchase has thrown the $14.1 billion-deal into the lap of U.S. President Joe Biden, who has repeatedly said that he would block the merger. It is the wrong decision for many reasons. Nippon Steel, and Japan, have good reasons to be angered and aggrieved.
Nippon Steel announced that it wanted to purchase U.S. Steel last year. The deal made good sense. The Japanese steelmaker hoped to compensate for the limits of its home market, and the U.S., which has recorded the highest growth of all developed economies since the end of the COVID-19 pandemic, was an obvious choice for an investment.
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