Washington, D.C. — Faced with a rapidly shrinking and aging population at home, Japanese companies have been sharply increasing investments in the U.S., the world’s largest and growing consumer market. Despite Japan’s economic struggles in recent decades, the country became the number one investor in U.S. businesses in 2019, and the trend is expected to continue. Other nations in Asia and Europe with similar demographic challenges are likely to follow its lead, bringing opportunities for new jobs and economic growth to American communities.
Today, the Progressive Policy Institute (PPI) released a report titled “Behind Japan’s U.S. Steel Bid: An Aging, Shrinking Home Market,” which provides a fresh perspective on the Nippon Steel-U.S. Steel merger by closely examining Japan’s economic realities behind Nippon Steel’s pursuit of the American industrial icon. While Japan is just one example of an allied country struggling with domestic economic growth, other friendly allied countries are looking to the U.S. as an attractive investment destination.
“The population’s shrinking and aging has been pushing Japanese businesses to invest in the U.S. to chase growth, and those from other countries facing similar challenges will surely follow,” said report author Yuka Hayashi. “The U.S. has to decide whether to embrace this exceptionally fortunate position as the world’s prime investment destination or turn inward and spurn opportunities to grow.”
As competition with China escalates, the report emphasizes the importance of the longstanding U.S.-Japan relationship and makes the case for the joint benefits of the merger for both Japan and the United States. Allied countries like Japan are rushing to take advantage of tax credits and subsidies provided by the Inflation Reduction Act and the CHIPS and Science Act, and the report argues the U.S. should welcome the influx of friendly foreign investment with open arms, while making sure critical technology doesn’t fall into the hands of adversarial nations.
Read and download the report here.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.
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Media Contact: Tommy Kaelin – tkaelin@ppionline.org
