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Trump meets Asian ally's new leader for first time

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Trump suggests deal in offing over U.S. Steel

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Ishiba touts plan to raise investment in US to $1 trillion

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Japan to increase LNG purchases

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Countries reiterate shared concerns about China

(New throughout with fresh comments from press conference)

By Trevor Hunnicutt, David Brunnstrom and Chizu Nomiyama

WASHINGTON, Feb 7 (Reuters) - President Donald Trump on

Friday pushed Japan to invest in U.S. energy and technology,

showered his closest Asian ally with praise and sought a way out

of a dispute over a Japanese bid for U.S. Steel during

Prime Minister Shigeru Ishiba's first White House visit.

Trump announced progress on Nippon Steel's ( NISTF ) blocked

$14.9 billion attempt to take over U.S. Steel, which he has long

opposed.

Trump said Nippon was now looking at an "investment not a

purchase," and added, "I'm okay with that, sure." U.S. Steel

shares traded down about 6%. The companies did not comment,

although two sources close to the deal told Reuters Nippon Steel

had not withdrawn its bid to buy the U.S. firm.

The U.S.-Japan talks come as escalating trade tensions

in the aftermath of Trump's January inauguration threaten to

rupture the global economy. On Friday, Trump unveiled plans next

week to impose reciprocal tariffs on many countries. It was

unclear if they would apply to Japan.

Trump pressed for Tokyo to close its $68.5 billion trade

surplus with Washington but expressed optimism this could be

done quickly, given a promise by Ishiba to bring Japanese

investment in the U.S. to $1 trillion as well as new purchases

of U.S.-produced liquefied natural gas, ethanol and ammonia.

Japan had the largest foreign direct investment position in

the United States in 2023 with $783.3 billion, followed by

Canada, and Germany, according to data from the U.S. commerce

department.

In a press conference, Trump also said the Japanese had

expressed interest in a $44 billion gas pipeline in Alaska, but

a Japanese official privately told Reuters they still nursed

doubts about the project's viability.

TENSIONS

The Republican U.S. president, whose first three weeks in

office have shredded norms and shaken foreign capitals from

Ottawa to Bogota, has taken a more conventional approach to

Washington's longstanding Asia-Pacific allies, including Japan,

South Korea, Australia and the Philippines.

That approach was on display in a joint statement between

the leaders that borrowed liberally from language the countries

used under former President Joe Biden.

It included familiar language expressing similar views

opposing Chinese military actions in the South and East China

Seas, as well as the Taiwan Strait, support for Japanese

security, concern over North Korea and Russia.

Trump and Ishiba exchanged compliments during a joint press

conference and the U.S. president agreed to travel to Japan in

the near future.

"On television, he is frightening and he has a very strong

personality," Ishiba said at the press conference, drawing

laughter from Trump. "But when I met with him, actually, he was

very sincere and very powerful."

As the two sat together in the Oval Office, Trump told

reporters the countries would work together to get U.S. trade

deficit with Japan down to "even" from its current level.

"Should be pretty easy to do," he said. "I don't think we'll

have any problem whatsoever. They want fairness too."

Ishiba highlighted investment plans by Japanese firms Toyota ( TM )

and Isuzu ( ISUZF ). Asked about the possibility of tariffs, Ishiba said

he was "unable to respond to a theoretical question."

Trump said that after Friday's meeting, he was "confident

that the cherished alliance between our two countries and others

also will continue to flourish long and into the future."

CHINA TRADE

Trump's early fight with China over synthetic opioids and

warnings of tariffs against other countries - Japan included -

have threatened to disrupt commercial relations in Asia and

beyond.

Trump put a 10% tariff on all imports from China in what he

called an "opening salvo" in a clash between the world's two

largest economies, sending consumers and businesses scrambling

to adjust.

Trump spoke to Chinese President Xi Jinping days before

taking office and has said he will discuss tariffs with him

soon.

Japan is especially trade-dependent. A major exporter, it

counts on imports for much of its food and natural resources,

and many of its firms are deeply invested in and reliant on

China.

Trump was close with the late Japanese Prime Minister Shinzo

Abe but has no relationship with Ishiba, who took office in

October. Analysts said the early White House visit for Ishiba

may be a promising signal.

"Japanese Prime Minister Ishiba's mission was to get in

Donald Trump's good graces and he seems to have succeeded

splendidly," said Danny Russel, vice president of the Asia

Society Policy Institute.

"Ishiba handled the notoriously impulsive Trump masterfully,

and in doing so likely bought Japan some time and goodwill."

But Russel said Japan's increased purchases were unlikely to

come close to wiping out the two country's trade imbalance.