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
