Nippon Steel's acquisition of U.S. Steel aims to circumvent tariff barriers imposed by the United States and to address trade protectionism under the "America first" policy, said a Japanese law professor.
Kusumoto Junichiro made the remarks in response to the purchase launched by the Nippon Steel Corporation, Japan's largest steelmaker headquartered in Chiyoda-ku, Tokyo.
On April 12, shareholders of U.S. Steel gave their approval to the proposed acquisition by Nippon Steel valued at 14.9 billion U.S. dollars. This significant milestone brings the merger closer to completion despite growing political resistance to the agreement.
"According to the 'America First' policy, the United States imposes high tariffs on imported goods, and Japanese exports to the United States face the same fate. There is no way out for Nippon Steel but to buy the American company. Otherwise, Japanese products exported to the United States will be subject to high tariffs, which is a matter of life and death for Japanese companies," said Junichiro.
The acquisition is beneficial to the United States in terms of economic growth and corporate development, he said.
"The acquisition [of U.S. Steel by Nippon Steel] can produce a win-win outcome. If the act can increase the value of the enterprise, it is certainly a good thing for the United States. For now, the merger can protect the employment of U.S. Steel workers, and keep the name of the U.S. Steel for further use. It's just a thing about a shift from the ownership of the American capital to that of the Japanese capital. However, for the United States, it's a matter of self-esteem that cannot be accepted by the United States itself. So the acquisition is of positive significance economically, as it's a win-win result for both the United States and Japan. And from a practical point of view, I think it's a very good acquisition case without any problem," said the professor.
Japan's trade deficit in fiscal 2023 shrank around 70 percent from a year earlier to 5.89 trillion yen (about 38 billion U.S. dollars), government data showed on April 17.
In the fiscal year which ended in March, exports expanded 3.7 percent to 102.90 trillion yen, topping 100 trillion yen for the first time and marking a record high for the third straight year, according to a preliminary Finance Ministry report.
Data for the month of March released Wednesday showed that Japan registered a trade surplus of 366.5 billion yen, the first surplus in three months, against the year-before deficit of 750.9 billion yen.
In March, exports swelled to 9.47 trillion yen, up 7.3 percent from a year ago, while imports declined 4.9 percent to 9.10 trillion yen.
Japan's acquisition of U.S. steel factory aims to offset tariffs: professor
A conference on sustainable development cooperation among Shanghai Cooperation Organization (SCO) member states concluded with the signing of 18 key projects worth a total of 4.795 billion yuan (about 655.5 million U.S. dollars) on Thursday in north China's Tianjin Municipality.
The projects, covering new energy, new materials, infrastructure, and automotive supply chains, are expected to boost practical cooperation among member states.
Nearly 400 guests, including officials and enterprises from SCO member states, attended the opening session. The conference is part of a series of activities ahead of the upcoming SCO summit in China this autumn.
The agreements involve eight countries, including the UAE, Egypt, and Uzbekistan. Notable projects include a 200-megawatt transformer substation in Egypt's Suez Canal Economic Zone and a collaboration between the UAE and Tianjin Municipality to help local enterprises expand overseas.
Ahmed El Homosani, CEO of the Sczone Utilities, highlighted the importance of the power substation project in attracting quality investments. "What we are going to sign is a framework agreement regarding building a new substation, 200 mega of electricity power. It will attract more and better investments," he said.
Meanwhile, Avinash Jagetiya, CEO of UAE's Sun Management Consulting, emphasized the significance of the cooperation agreement with Tianjin. "Yes, I'm certainly looking forward to this conference and that is the reason I'm here. And in this conference also we are going to sign an MOU (Memorandum of understanding) with Tianjing government. And this project is a step forward in serving the Tianjin enterprises and expanding their footprints and overseas market," he said. The conference also featured specialized sessions on energy, infrastructure, and mining cooperation. Energy cooperation was a focal point, with representatives from Kyrgyzstan noting increased interest from Chinese investors in energy projects.
"At present, a large number of Chinese investors are directly engaged with Kyrgyzstan's State Investment Agency for energy projects, including hydropower, solar and wind power plants," said Maksatbek Botoyarov, chief specialist of the Department of Investment Attraction and Regional Development of Kyrgyzstan.
Participants, including representatives from traditional energy firm LONGi, expressed commitments to increasing investments in the new energy sector and exploring green transformation pathways with SCO members.
"Over the years, we have developed green electricity and green hydrogen products and technical solutions to help these SCO countries achieve their sustainable development and energy transition. We are also actively communicating with the Kazakh government to formulate specific plans and programs for implementation," said Shi Shufeng, marketing director of LONGi's Central and East African Market.
SCO sustainable development conference secures 18 projects involving nearly 4.8 bln yuan
