The recent buzz surrounding Japan's Nippon Steel acquisition of the 122-year-old United States Steel for $14.9 billion and Yaskawa Electric's potential $200 million investment in the U.S. has once again shone a spotlight on the enduring economic ties between America and Japan.
At the 53rd annual joint meeting of the Japan-Midwest U.S. Association held in Tokyo, Japanese Foreign Affairs Minister Yamada Kenji noted that Japan-U.S. economic ties are one of the key pillars that underpin the Japan-U.S. alliance. Kenji highlighted Japanese companies' investment initiatives in the American Midwest, a region often cited as the manufacturing backbone, accounting for roughly a third of the nation's manufacturing jobs.
The Midwest's significance to Japanese investors becomes evident considering the substantial increase in Foreign Direct Investment (FDI) from Japan into the U.S. manufacturing sector by 384% between 2009 and 2021, as the Japan External Trade Organization (JETRO) reported.
Diverse Japanese brands such as Toyota Motor Corp, Honda Motor Co, and Hitachi Ltd. are already thriving in various sectors across Midwest states.
This raises an important question: What makes the Midwest alluring to Japanese investors?
The answer is in the region's robust logistical infrastructure and strategic positioning across 12 states. Illinois' accessibility to the entire North American market within a four-hour flight, Iowa's abundance of transportation and intermodal services, and Kansas' highly skilled workforce supported by strong industry-academia partnerships collectively enhance the appeal.
Each Midwest state boasts its unique advantages: Michigan leads in electrical, mechanical, and industrial engineering; Minnesota excels in balancing industry 4.0 and sustainability; Missouri offers global distribution advantages through its unrivaled waterway access, highways and railroads; while Ohio's proximity to 60% of the U.S and Canadian market is a strategic advantage. Wisconsin's access to major waterways further contributes to the region's attractiveness.
State officials have embarked on trade missions to Japan as part of their efforts to bolster business and economic development ties.
Governors, like Eric Holcomb of Indiana and Gretchen Whitmer of Michigan, through multiple visits to Japan, showcase their states' diverse industries, robust transportation infrastructure, comprehensive ecosystem support, and vibrant urban life, laying out the myriad offerings available to potential Japanese partners.
