The visit of the US Secretary of State, Antony Blinken, to Japan has been overshadowed by Washington's decision to block a purchase and sale agreement of a US company by a Japanese company.
The decision of the president of the United States, Joe Biden, to Block Nippon Steel's bid to buy US Steel for $14.9 billion, overshadows Secretary of State Antony Blinken's visit to Japan on Tuesday to hold farewell meetings with Washington's most important ally in Asia.
The rejection, announced Friday, has shaken U.S. efforts to boost ties, just as the political crisis in neighboring South Korea potentially complicates a deepening trilateral relationship between Washington, Seoul and Tokyo, formed to counter the growing power Chinese military.
On Monday, Japanese Prime Minister Shigeru Ishiba called Biden's decision to block the sale of US Steel to Nippon Steel “baffling.”
Although Japanese investments in the United States could also cool, analysts say that given the two countries' shared security concerns about China, any damage to their broader relationship will likely be limited amid the political transition in the United States, where Donald Trump will assume the presidency on January 20.
Meetings
Accompanied by White House National Security Advisor Jake Sullivan, Blinken met in Tokyo with Japanese Foreign Minister Takeshi Iwaya, which was followed by meetings with other senior Japanese officials, including Ishiba.
Seven trips to Japan in the last four years “are proof not only of the importance, but of the centrality that the United States places on our partnership. President Biden asked me to come on this latest trip to underscore that,” Blinken told Iwaya.
“We have, between our two countries, a partnership that began by focusing on bilateral issues, that worked on regional issues and that is now genuinely global,” he added.
Ahead of his trip, the State Department said Blinken wanted to build on the momentum of trilateral cooperation between the United States, Japan and South Korea.
In Seoul on Monday, Blinken reaffirmed his confidence in South Korea's handling of its political crisis, as investigators sought to expand an arrest warrant for ousted President Yoon Suk Yeol.
Trump's allies have also assured Seoul and Tokyo that he will support continued efforts to improve ties and advance military, economic and diplomatic cooperation to counter China and North Korea, Reuters reported ahead of Trump's re-election on 5 November.
Tension, damage limited by Nippon Steel decision
Nippon Steel and US Steel filed a lawsuit on Monday accusing Biden of violating the US Constitution by blocking their $14.9 billion merger through what they call a bogus national security review. They asked a US federal court to overturn the decision.
Nicholas Szechenyi, a Japan expert at the Center for Strategic and International Studies in Washington, said Biden's decision would make Blinken's visit to Tokyo “uncomfortable.”
However, “Japan will not let the Nippon Steel decision poison the US-Japan relationship; it is too important for Japan's national security,” he said.
After meeting with Ishiba at his residence on Tuesday, Blinken did not respond to shouted questions from reporters about the possible impact of Biden's Nippon Steel decision on bilateral ties.
They discussed economic and security ties, including the “importance” of Japanese investments in the United States, according to a Japanese government news release.
A Japanese diplomat told Reuters that Biden's decision could cool foreign direct investment, but that he hoped close relations between the United States and Japan would continue, with a strong emphasis on restoring the strong ties with Trump seen during his previous administration. , and taking advantage of the increasingly bellicose mood in Washington over China.
Business groups in both Japan and the United States pushed hard for the merger, backing their arguments with warnings about the effect on the U.S.-Japan relationship.
But the merger faced opposition from both Biden and Trump, who was assiduously courted by Japan in the run-up to his re-election.
Trump reiterated after his election victory that he was “totally against” the merger and promised to block it as president and support US Steel with tax breaks and tariffs.
A former senior official in the first Trump administration told Reuters he believed Trump would have taken the same approach as Biden.
Marc Busch, a fellow at Georgetown University's McDonough School of Business, predicted “significant consequences” for U.S. efforts to work with allies to create supply chains resilient in the face of Chinese dominance or competition in key areas.
“Japan and other allies will be hesitant to invest in or align themselves with politically sensitive US supply chains. China must be laughing to itself that it could never have expected a better outcome.”