(Corrected name to Takeshi, not Takashi, in paragraph 3 of Jan. 7 story)

By David Brunnstrom, Simon Lewis (JO:), Trevor Hunnicutt and Tim Kelly

TOKYO/WASHINGTON (Reuters) – The foreign ministers of Japan and the United States said their countries’ ties were stronger than ever on Tuesday, even after Japan’s prime minister called out U.S. President Joe Biden’s decision. to block Nippon Steel’s $14.9 billion bid for US Steel “is confusing.”

Biden’s move on Friday was a shake-up in US efforts to improve ties as neighboring South Korea’s political crisis could complicate the deepening trilateral ties between Washington, Seoul and Tokyo that have been forming. to counter China’s growing military power.

On Monday, Japanese Prime Minister Shigeru Ishiba expressed confusion over Biden’s decision, but after a meeting in Tokyo on Tuesday, US Secretary of State Antony Blinken and Japanese Foreign Minister Takeshi Iwaya hailed the bilateral relationship as stronger than ever.

In comments to the media, where no questions were taken, Blinken did not mention Nippon Steel, but a statement from Japan’s foreign ministry said he and Iwaya “exchanged views on economy, including the acquisition of United States Steel (NYSE:) Corporation by Nippon Steel Corporation.”

It said they “reaffirmed the importance of Japan-US economic relations, including investment by Japanese companies in the US”

Blinken said the two countries were “leading the way” in cooperation between like-minded countries and added: “I have great confidence that will continue for many, many years to come.”

After meeting with Ishiba at his residence, Blinken did not respond to questions raised by reporters about the potential impact of Biden’s decision on bilateral relations.

Analysts say that while this will have a chilling effect on Japanese investment in the US, any damage to their broader relationship will be limited due to the two countries’ shared security concerns about China.

Japanese and US business lobbies have pushed hard for unification, supporting their arguments with warnings about the impact on vital US-Japan relations.

But it still faces opposition from Biden and President-elect Donald Trump, who took office on January 20 and is actively courting Japan in the run-up to his re-election.

Before his trip, the State Department said Blinken wanted to build on the momentum of the US-Japan-South Korea trilateral cooperation.

In Seoul on Monday, Blinken reaffirmed confidence in South Korea’s handling of its political turmoil as investigators there seek to extend an arrest warrant for impeached President Yoon Suk Yeol.

Trump’s allies have also assured Seoul and Tokyo that he will support continued efforts to improve ties and advance military, economic and diplomatic cooperation against China and North Korea, Reuters reported before the election in US.

TENSION, LIMITED DAMAGES FROM NIPPON STEEL DECISION

Nippon Steel and US Steel filed the lawsuit on Monday alleging that Biden violated the US Constitution by blocking their merger through what they called a national security review. They called on the US federal court to overturn the decision.

A Japanese diplomat told Reuters that Biden’s move would chill foreign direct investment, but hoped that close US-Japan relations would continue, with a strong emphasis on re-establishing the strong relationship with Trump seen in his previous administration, and took advantage of the more hawkish situation. in Washington in China.

Nicholas Szechenyi, a Japan expert at Washington’s Center for Strategic and International Studies, said Japan will not allow the decision to poison US-Japan relations. “This is very important for Japan’s national security,” he said.

Trump reiterated after his election victory that he was “totally opposed” to the merger and vowed to block it as president and support US Steel with tax breaks and tariffs.

A former senior official in Trump’s first administration told Reuters he believed Trump would take the same approach as Biden.

Marc Busch, a fellow at Georgetown University’s McDonough School of Business, predicted “significant setbacks” for US efforts to work with allies to create strong supply chains in the face of dominance. in China or competition in key areas.

“Japan and other allies have reservations about investing in or aligning with politically sensitive US supply chains,” he said. “China must be laughing at itself that it can never hope for a better outcome.”