Photo/Illutration The Nippon Steel Corp. logo (Asahi Shimbun file photo)

Japanese manufacturers are on tenterhooks following Donald Trump’s victory in the U.S. presidential election with his “America First” agenda.

Nippon Steel Corp. is particularly twitchy as the Japanese steel giant is in the midst a 2 trillion yen ($12.9 billion) deal to acquire U.S. Steel Corp.

U.S. Steel’s headquarters and mills are in Pennsylvania, a key battleground state in the election that was won by Trump. It is also home to the United Steelworkers (USW), which opposes the acquisition, and other labor unions.

Trump, an outspoken critic of the acquisition, vowed to block the deal if he won the election.

Lame duck President Joe Biden also raised concerns about it earlier this year.

The Biden administration pushed for a review of the proposed takeover this summer, citing national security issues. However, the review process was delayed until after the election.

Nippon Steel had been aiming to finalize the acquisition by the end of this year.

To navigate shifting political winds, the Japanese company has hired former U.S. Secretary of State Mike Pompeo as a key adviser.

Pompeo, who served under the previous Trump administration, penned an op-ed in The Wall Street Journal in August, arguing that the deal would benefit U.S. workers and their families while helping to revitalize domestic manufacturing.

In late October, Nippon Steel President Tadashi Imai expressed cautious optimism about the acquisition, saying progress was being made in securing support for the deal.

“No matter who becomes president, Japan and the United States are allies,” Imai said. “We expect continued close cooperation in trade and investment.”

Other Japanese firms are also anxious about Trump’s America First approach, particularly his focus on bringing manufacturing jobs back home.

Honda Motor Co., for instance, operates big plants in Mexico, where it manufactures around 200,000 vehicles annually, of which around 160,000 are exported across the border to the United States.

The company currently benefits from a tariff-free arrangement, provided certain conditions are met. But in his campaign platform, Trump promised to impose a uniform maximum tariff of 20 percent on all imports and hinted he would revise trade agreements now in place.

“If tariffs are imposed, it will have a significant impact,” said Shinji Aoyama, Honda’s executive vice president, at a recent news conference. “We will need to engage in lobbying and other efforts to address the situation.”

Aoyama also hinted at shifting production to the United States or other locations in the long term.

Daikin Industries Ltd., a global leader in air conditioning systems, shares similar concerns.

The company has been increasing production at its Mexican plants to meet demand in the U.S. market.

“If tariffs on U.S. exports rise, we will need to reconsider our investment plans for the Mexican facilities,” Daikin President Naofumi Takenaka said at a recent earnings briefing.

Beyond tariffs, Takenaka also highlighted the potential challenges posed by a slowdown in U.S. environmental policies under Trump’s leadership.

Specifically, Takenaka noted the risk of reduced government subsidies for energy-efficient air conditioners.

“While we don’t rely solely on subsidies for our business, a change in policy would certainly create headwinds,” he said. “Different states in the U.S. have varying levels of commitment to environmental issues, so we may need to adjust our strategy on a regional basis.”

Omron Corp., a big electronics company, is also closely watching the situation.

“We don’t know what policies will emerge yet, but it’s clear that we need to be more sensitive to geopolitical risks,” said the company’s president, Junta Tsujinaga. “We will continue to monitor the situation closely so we can prepare for potential challenges.”

(This article was written by Seisaku Yamamoto, Daisuke Matsuoka and Satoshi Seii.)

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