US rejection of Nippon Steel’s bid for US Steel rankles Washington’s key ally in Asia

BANGKOK (AP) — U.S. President Joe Biden’s decision to reject a bid by Nippon Steel to acquire U.S. Steel on national security grounds isn’t the first time friction over trade and investment has irked Washington’s closest ally in Asia.

There have been plenty of scraps over trade in the past few decades, and Secretary of State Anthony Blinken sought to smooth ruffled feathers in a visit to Tokyo on Tuesday.

Nippon Steel Chief Executive Eiji Hashimoto said the top Japanese steelmaker was standing firm on its proposed $15 billion friendly acquisition. Nippon Steel and U.S. Steel filed a federal lawsuit challenging the Biden administration’s decision.

But the assertion that the proposed deal could threaten U.S. national security has stung.

Many in Japan see the decision as a betrayal by Washington after decades of U.S. pressure to lift barriers to investment and trade. The timing doesn’t help, with Japanese businesses already bracing for potentially damaging tariff hikes once President-elect Donald Trump takes office.

Japanese Prime Minister Shigeru Ishiba was blunt in warning that spoiling the deal might hurt Japanese investment in the U.S.

Here are some key issues at stake:

Making nice

While in Tokyo in a farewell tour before Biden leaves office, Blinken told reporters he believes that during the past four years the alliance with Japan has “grown stronger than it’s ever been before.” Japan and the U.S. are mutually the largest investors in each other’s economies, he noted, “strengthening the foundation for many years to come.” Japan’s Foreign Ministry said in a statement that the U.S. Steel decision came up during Blinken’s meeting with Foreign Minister Takeshi Iwaya. But it said only that the two sides had “reaffirmed the