In this example "String" does not mean what you think it does.
It is not the name of the class java.lang.String. Instead, you've declared a type parameter in line 1, which is confusingly named "String".
Normally people use single upper case letters for type variables, for example "T", so you'd write "class Box<T>" in line 1. But you can name a type parameter anything you like, including the name of an existing class such as "String".
As Jesper said, you've used String as a generic type variable, and it's clashing with the class String. The generic type takes precedence, so on line 10 that's what the compiler things you're referring to. And because the type variable applies to specific instances of Box, it can't be used in a static context.