Portugal Colonial - Blinken in Japan after rift on steel deal

Business groups say Biden's decision could have a chilling effect on investment in the world's largest economy, where leaders across the political divide have called for closer ties with Japan to counter a rising China.

With two weeks left before president-elect Donald Trump takes over, the top US diplomat arrived in Tokyo from Seoul late Monday on what is likely his final tour.

Biden has called nurturing US alliances a top priority -- but days before Blinken's trip, he blocked Nippon Steel's $14.9-billion takeover of long-struggling US Steel, citing national security concerns.

In response, the two companies filed a lawsuit on Monday against the Biden administration's "illegal interference" in the transaction.

Nippon Steel chair Eiji Hashimoto on Tuesday slammed "Biden's unjust decision" and said the companies were committed to fight for their merger.

"We're certain the lawsuit will reveal a set of facts that clearly violate the constitution and the law, so I believe we have a chance of winning," he told reporters.

Trump, who takes office on January 20, "wants to make manufacturing strong again, and once again enrich the lives and future of manufacturing workers", Hashimoto added.

"This is exactly in line with what we're doing."

- Investment 'concerns' -

Nippon Steel had touted the takeover as a lifeline for a US company long past its heyday, but opponents warned that the Japanese owners would slash jobs.

Biden had criticised the deal for months, while holding off on a move that could hurt ties with Tokyo.

In their suit, US and Nippon Steel argued that Biden had blocked the deal for purely political reasons by ignoring the rule of law to gain favour with workers' unions.

Blinken had a sushi breakfast at a famous fish market on Tuesday and will later meet Prime Minister Shigeru Ishiba, who said Monday that the United States should "explain clearly" the security concerns cited by Biden.

"There are concerns being raised within Japan's industrial world over future Japan-US investment," Ishiba warned.

Protectionist measures are expected to intensify under Trump, who in his last term exited a nascent Pacific-wide trade pact and has vowed to use tariffs to protect US industry.

Separately, Blinken is expected to discuss a flare-up in tensions on North Korea, which on Monday test-fired a missile into the sea just as the US politician was visiting fellow ally South Korea.

Blinken had been in Seoul in part to push to preserve three-way cooperation by the United States, Japan and South Korea.

Conservative President Yoon Suk Yeol has pushed to turn the page on historical tension with Japan, but he was impeached after he stunned South Korea last month with a failed attempt to impose martial law.

"It's in the strategic interest of each of our countries not just to sustain this trilateral cooperation, but to grow it in the years ahead," Blinken told reporters in Seoul.

Ferreira--PC