Photo/Illutration A U.S. Steel plant in Pennsylvania (Asahi Shimbun file photo)

Nippon Steel Corp.’s move to acquire U.S. Steel finally got the seal of approval from the U.S. government after it intervened and set conditions.

We give high marks to the partnership agreed to by private-sector companies of Japan and the United States.

The U.S. government needs to respect Nippon Steel’s autonomous management and not meddle in it.

Prior to winning the presidential election last November, Donald Trump vowed to block the acquisition.

But he has since toned down his attitude and said he would allow “investment” by Nippon Steel. Still, he expressed qualms about the Japanese company’s goal of making U.S. Steel a wholly owned subsidiary.

Nippon Steel made its intentions known about 18 months ago. The plan to make U.S. Steel a subsidiary was approved with the signing of a presidential order just before the deadline that revised one signed by Trump’s predecessor, Joe Biden, to stop the acquisition.

U.S. Steel is a noted corporation that at one time boasted the world’s largest share of crude steel production. But it has fallen on hard times.

Even if the U.S. government was trying to protect this symbol of U.S. industrialization from being controlled by foreign capital, the argument that an acquisition by a company from Japan, a U.S. ally, would create a risk in U.S. national security and in an important supply chain lacked logic.

It was a mistake to try to push through protectionist policy.

It is only right that the U.S. government did an about-face and allowed U.S. Steel to become a wholly owned subsidiary.

As a condition for having its acquisition approved, Nippon Steel agreed to sign a national security agreement with the U.S. government.

The U.S. side will have some influence over company management through the issuance of “golden shares” to the U.S. government that grant it veto power over important management decisions.

In addition to the 2 trillion yen ($13.8 billion) for the acquisition, Nippon Steel will also invest about 1.6 trillion yen on production facilities by 2028.

The agreement appears to include wording on the composition of the U.S. Steel corporate board as well as production capacity in the United States.

But using that agreement to flex its muscle will limit Nippon Steel’s management freedom and perhaps thwart the rebuilding of U.S. Steel on the path to sustained growth.

Concerns about the investment environment in the United States could lead other Japanese companies to take a more cautious stance about investing there. The interests of both Japan and the United States will not be served by such a development.

Prior to approving the acquisition, Trump doubled the tariff rate on steel and aluminum to 50 percent.

Trump seems to be trying to take credit for increased investment in the United States through his high tariff policy.

But the acquisition plan was well under way before the increased tariffs imposed by the Trump administration.

Trying to claim that Nippon Steel’s investment was the result of the tariff policy is a wishful boast.

Trump also suddenly indicated that the 25-percent additional tariff on imported autos would be raised.

That was a high-handed move that could deal a crippling blow to the Japanese economy.

Prime Minister Shigeru Ishiba and Trump will soon meet for talks on the tariffs.

Tokyo should not simply compromise just because the acquisition was approved but continue to seek a retraction of all the tariff measures.

--The Asahi Shimbun, June 15

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