“We could really look at our policy toward foreign investments and make clear who are welcome, who are not, and set up a roadmap for future foreign investments,” said Yuka Hayashi, senior fellow at the Progressive Policy Institute, a Washington think tank that views foreign investment as a net positive for American workers. “But then we have this Nippon Steel deal that really undermines such efforts.”
She added, “In order to confront China, we have to work more closely with allies, countries like Japan and those in Europe. But on the other hand, we have this domestic economic nationalism and it’s threatening to shut out everyone, not just the Chinese.”
The economic nationalism argument against the Nippon-U.S. Steel deal is strange on its face. Japanese companies have bought, owned and sold many U.S. companies over the last 40 years, including banks, movie studios and even chipmakers.
The largest pharmaceutical company in the Twin Cities was bought several years ago by a Japanese firm, which operated it with no major changes or disruptions until selling it to a Taiwanese firm earlier this year. And the biggest purchase by Minneapolis-based U.S. Bancorp over the last two decades was the U.S. operations of a Japanese bank.
Take politics away and people might see this deal as simply two companies trying to survive as they face competitors in China, which makes about as much steel as companies in the other 71 steel-making countries combined.
Japan is one of the first advanced economies to experience population decline. Its businesses have to turn outward for growth, innovation and the best return on capital. Having built itself into a global power by exporting cars, electronics and other goods, Japan today makes its money by investing abroad.
