Biden is hosting Japan's Kishida. But the Nippon Steel deal is not on the agenda

President Biden officially welcomed Japanese Prime Minister Fumio Kishida to the White House on Wednesday for a formal state visit, an honor that includes an Oval Office meeting, a press conference, and a lavish state dinner with a performance by Paul Simon.

Japan has long been one of America's closest allies, and the Biden administration has sought to strengthen the relationship further as part of its push to counter China.

"On the economic front, our ties have never been more robust," Biden said at a press conference with Kishida.

But Biden has come out against a recent move by Japan's Nippon Steel to purchase U.S. Steel for nearly $15 billion, an unusual intervention that has raised questions about the economic ties between the two nations.

Biden says U.S. Steel should remain in American hands

Last month, when Biden took the unusual step to weigh in on the deal, he sided with union workers and said the Pittsburgh-based company should remain in the hands of the United States. Former President Donald Trump, who is running against Biden in the November presidential election, has also said he would block it.

In his statement, Biden called U.S. Steel "an iconic American steel company" and said it was "vital" that it remain "domestically owned and operated." The United Steelworkers union endorsed him for his reelection campaign less than a week later.

Asked about the deal during a press conference with Kishida, Biden said, "I stand by my commitment to American workers. I'm a man of my word, I'm going to keep it." He also said he'd stand by his commitments to the U.S. alliance with Japan.

Kishida said that he hopes the discussions about the deal unfold positively for both sides, and said that he thought the U.S. government was following appropriate procedures based on law.

"Japan is the largest investor to the U.S.," he told reporters. "Japanese businesses employ close to 1 million workers in the United States, and investment from Japan to the U.S. can only increase upward in the months and years to come."

The politics of the steel deal

A senior administration official told reporters that the subject was not on the agenda for the meeting between Biden and Kishida, and said that the relationship between the two countries was far bigger than a single deal.

Business groups including the U.S. Chamber of Commerce have warned Biden's intervention could discourage foreign investment.

Scott Lincicome, a senior fellow at the Cato Institute, a conservative think-tank, told NPR that Biden's decision to oppose the deal shows it was a political choice. Biden needs the support of union workers this November, and Pennsylvania is a critical swing state.

"That really sends a bad signal, not just to Japan but to the world that economics is not driving the bus," Lincicome said. "What's driving the bus, first and foremost, is politics."

Dan Price, a top international economic official in the George W. Bush White House, said it was striking that Biden would preemptively oppose a deal under an interagency national security review, especially when the deal is with a company from a country that is such a close ally.

"During the prime minister's visit, the leaders will be discussing real national security threats," said Price, who is now managing director at Rock Creek Global Advisors. "So we should be seeking to strengthen our partnership, not threatening protectionist action to score political points."

There was a long list of other 'deliverables' for this meeting

The White House is trying to illustrate the depth of its ties with Japan with an unusually long list of agreements or "deliverables" between the two countries — more than 70 items. Typically, a state visit might see a dozen or so such agreements.

Many of the items deal with security issues, including new levels of military cooperation, joint production of weapons, partnerships on space exploration, and new research projects in the area of artificial intelligence with companies like Microsoft and Amazon.

Countering China is a major subtext for the visit, officials told reporters. On Thursday, Biden and Kishida will take part in a trilateral meeting with Philippines President Ferninand Marcos Jr. A senior administration official described the strategy as a way to "flip the script" on China, which usually tries to isolate nations in the region.

"The country that's isolated is China, not the Philippines," the official said.

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