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For the head of a 177-year-old listed company, there is no hard and fast way to prevent people from comparing you to a mafia boss. A common tactic, however, is to avoid holding a 106-minute press conference where you threaten to completely destroy your enemy, ransack his house and take away his dog.
But the convention enters 2025 bruised, confused and reeling against an even more battering future. Is 21st century Japan worse than bad? Is this the master villain? Is it a blood brainwash? It may not seem like it, but the country needs to prepare for a discourse where the chief executives of American companies do not think to say it.
In the ownership of the dog, Lourenco Goncalves, CEO of the US steelmaker Cleveland-Cliffs, is ready for the calculated unconventional bada bing. He is so confident that he will get everything (car, house, last penny) from Eiji Hashimoto, CEO of Nippon Steel, that he told reporters that he has started checking the rules for exporting dogs from Japan to the US.
The vituperation built from there. This week’s press conference — supposedly called to explain Cleveland-Cliffs plans to buy US Steel Now President Joe Biden is blocking Nippon’s bid on national security – there’s something more sinister than the usual M&A battle. It fits comfortably, however, in the context of the week before Donald Trump was sworn in.
Nippon Steel filed a lawsuit accusing Goncalves of running a campaign to derail its merger with US Steel and of using tactics “more befitting of a mafia boss than the CEO of a company which is marketed to the public”. Goncalves, who said he would take legal action against Hashimoto in the US over the allegations, turned his response into a scathing, scathing attack on Japan itself. In it he warned several times of the folly of crossing Trump and, at one point, took out an American flag.
“China is bad. China is bad. China is terrible. But Japan is worse,” he said, adding: “You haven’t learned anything since 1945. You haven’t learned how good we are. , how kind we are.” He added: “Stop sucking our blood.”
All of this is really disturbing. Many have decided to dismiss Goncalves’ performance as spectacularly insane, and the attack on Japan as an angry, counterfactual haymaker.
A wiser take might be to look at it, however ugly, for its relevance, its origins and for its precise blowing of convention. Trump’s rise and return is framed by some as a moving series of rejections, by him and his supporters, of ideas, institutions, behaviors and interpretations that for a long time seemed unstoppable. This is an environment where Japan must be cautious, but at least now it has a sense of where the attack is coming from.
In a key moment, Goncalves recommended that his audience watch a revealing YouTube video of Trump who was interviewed by Larry King in 1987. In it, the incoming president railed against Japan as a “money machine” to which the US is more hospitable and generous. He was tired, he said, “of seeing other countries destroy the United States”.
Trump is certainly not alone in that interpretation: a common note of despair over US economic growth is being made just as Japan’s bubble is expanding and US supremacy is in real doubt. Profits for Japanese makers of steel, electronics, cars and motorcycles have come, indisputably, at the expense of American rivals.
Trump may be too busy to swallow the many serious analyzes published in the period dissecting US-Japan relations with warnings against Japan’s industrial policy, and nervousness around American deindustrialization. . But the sense of full-blown economic conflict is in the ether. Benevolent America versus advantage-taking Japan — its companies are putting US rivals out of business even as Washington guarantees Japan’s defense.
Goncalves did not invent the basis for the attack on Japan, but seized it from a moment in history that many had long ago decided to move on from, for many good reasons. Japan’s relative decline is one of them; the emergence of China as a greater threat is another.
Most important going forward, however, is the narrative corporate America and its investors have deployed for nearly four decades to convince themselves that deindustrialization is, ultimately, a good thing for profits and growth. That narrative may be ready for rejection and with it the many conventions that accompany the steady tightening of US-Japan relations.
Goncalves’ tirade may prove to be a one-off but the environment in which it arose was normal. Nippon Steel, in keeping with convention, declined to comment on whether Hashimoto had a dog.
