Business
Despite Blocked US Steel Bid, Japan Won’t Stop Seeking American Deals
As signs emerged that President Biden was gearing up to stop the Japanese steel maker Nippon Steel from acquiring Pittsburgh-based U.S. Steel, top Japanese officials repeatedly warned that quashing the merger would hinder economic ties between the allies.
Japan’s biggest business lobby, Keidanren, said in September that America’s investability would be tarnished if Nippon Steel’s $15 billion bid was blocked. Prime Minister Shigeru Ishiba of Japan reached out to Mr. Biden asking him to approve the deal during what he called a critical juncture.
In the United States, during a heated presidential campaign, both Mr. Biden and his opponent, Donald J. Trump, came out against the Japanese acquisition of U.S. Steel, an iconic American company in a key electoral state. Mr. Biden on Friday stopped the merger from going forward, arguing that foreign control of U.S. Steel would jeopardize America’s national security.
Nippon Steel and U.S. Steel assailed Mr. Biden’s decision, calling the deal’s review “deeply corrupted by politics” and its rejection “shocking.” The companies said on Friday they would consider taking legal action to try to revive the deal.
But while Mr. Biden’s decision sends a worrying sign to Japanese leaders about the perils of American politics, it is not expected to stop other companies from seeking to do deals in the United States.
Japanese businesses have had little choice but to move significantly toward the United States in recent years, as they have had a harder time investing in China. Now, in anticipation of a second Trump administration, executives are even more busily lining up fresh investments in America.
For decades, Japanese companies have sought growth opportunities outside the country, where the population is aging and declining, and currency fluctuations have imperiled export activities. Much of that expansion has been aimed at the United States and China, which have long vied to be Japan’s biggest trade partner.
But it has gotten more difficult for Japanese firms to operate in China because of less-friendly regulations and competition from state-backed rivals. China’s share of Japanese foreign direct investment has declined steadily over the past half-decade, while it has climbed in the United States. Japan became the top investor in America in 2019 — a position it has maintained each year since.
While the volume of Japanese-led deals in the United States stalled slightly last year, trade experts expect investments to pick up again when President-elect Trump takes office. That is because the risk of increased tariffs gives Japanese and other foreign companies a greater incentive to invest and produce in the United States over other countries, especially China.
Japanese power companies are eyeing a number of potential investments in natural gas and other energy projects promoted by Mr. Trump. At a Trump news conference last month, Masayoshi Son, the chief executive of the Japanese technology company SoftBank, pledged to invest $100 billion in the United States over the next four years.
“Business leaders will not look at a unique case like Nippon Steel and make decisions to withhold investment in the United States,” said Masahiko Hosokawa, a professor at Meisei University and former senior official at Japan’s trade ministry. “This is not a case that will cause damage, especially in the mid- to long term.”
Japan’s biggest business publication, Nikkei, wrote on Saturday that Nippon Steel’s crushed bid was a result of a mistaken calculation that “economic rationality” would prevail even in a presidential election year.
In December 2023, when Nippon Steel announced its plans to acquire U.S. Steel, executives at the company thought the deal would proceed quickly. As the Committee on Foreign Investment in the United States reviewed the deal, Nippon Steel doubled down on its bet on the United States, withdrawing from a longstanding joint venture in China that might have elicited suspicion from regulators.
Nippon Steel’s bid instead drew intense backlash from some politicians and union leaders, who said the purchase of a storied American manufacturer by a foreign entity would undermine national security and local industry. Early on, both President Biden and President-elect Trump said they were against the deal.
As part of its bid, Nippon Steel offered a large premium on U.S. Steel shares and promised to invest billions in the American company’s plants. Takahiro Mori, the Nippon Steel executive in charge of the deal, traveled repeatedly to the United States to hold meetings with over 1,000 employees, local officials and others with a stake in the deal.
Late last month, the review committee, known as CFIUS, sent a letter to the White House saying it was unable to decide whether Nippon Steel should be allowed to buy U.S. Steel. That paved the way for President Biden to terminate the transaction.
China, at the same time, has been trying to bolster relations with Japan. Some speculate the moves were made in anticipation of a trade war between the United States and China that is expected to worsen when Mr. Trump takes office.
In November, Beijing restarted a policy allowing Japanese nationals to make short-term visits without visas. Japan has been working to ease visa requirements for Chinese visitors. In September, China said it would gradually resume Japanese imports of seafood after banning them in response to Japan’s release of treated radioactive water into the ocean.
William Chou, the deputy director of the Japan policy center at the Hudson Institute, a Washington think tank, said he viewed the Nippon Steel case as a “one-off.”
“The U.S. has a long history of being a stable environment, and China is not an attractive place to increase investments at the moment,” Mr. Chou said. “But that’s not to say Japan won’t feel the inclination to hedge its bets.”
In July, as signs emerged that Nippon Steel’s acquisition might not be approved, one of its distributors, Marubeni-Itochu Steel, said it would purchase a stake in a Spanish steel company.
A person with knowledge of the purchase said Nippon Steel was eager for Marubeni-Itochu Steel to expand its presence in Europe, an increasingly important market since hopes were fading that Nippon Steel would gain a bigger toehold in the United States.
Business
Sweeping California law on single-use plastic meets with outrage from all sides as it goes live
Within days of California’s long-anticipated single-use plastic law going into effect, environmentalists, anti-waste activists and the packaging industry reacted with anger and frustration.
Anti-plastic activists say Gov. Gavin Newsom’s administration and CalRecycle inserted exemptions favoring the plastic industry into the law’s regulations that weaken it and undermine legislative intent.
“These new rules create huge loopholes for plastic packaging that violate the law,” said Avinash Kar, senior director of the toxics program at the Natural Resources Defense Council.
On the other side, the packaging industry has sued over similar laws in other states. “Our members have real concerns about cost, compliance, and constitutionality,” said Matt Clarke, spokesman for the National Assn. of Wholesaler-Distributors, which sued Oregon earlier this year over a similar waste law.
CalRecycle, the state’s waste agency, did not respond in time for publication. The final regulations putting the law into effect were released May 1 and posted for review Tuesday.
The environmental organizations say the law’s new final regulations open the door to what is known as “chemical recycling,” which produces large amounts of hazardous waste. The law also contains problematic exemptions for certain categories of plastic foodware, they say.
The language of the law forbids any kind of recycling that would produce significant amounts of hazardous waste. The new regulations allow for these recycling methods if the facilities are properly permitted.
The new regulations also exempt certain products if they are already covered by federal law. For instance, a packaging company, retailer or distributor can claim that they have such a preemption, Kar said, and CalRecycle might not immediately review that claim. “And as long as they don’t review it, they’ll get the exemption for as long as CalRecycle doesn’t review it,” creating a potential “forever loophole.”
“Californians were promised a system where producers take real responsibility for the waste they create,” said Nick Lapis, advocacy director for Californians Against Waste. “When regulations introduce broad exemptions and redefine key terms, that promise starts to erode. The details matter here, and right now they don’t line up with the intent of the law.”
Senate Bill 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act, was signed by Newsom in 2022. It was considered landmark legislation because it addressed the scourge of single-use plastics, requiring plastic and packaging companies to use less of them and ensuring that by 2032, all food packaging is either recyclable or compostable.
Accumulating plastic waste is overwhelming waterways and oceans, sickening marine life and threatening human health.
The law’s intent was not only to reduce it, but also to put the onus and cost of dealing with it on packaging producers and manufacturers, not consumers and local governments. It was supposed to incentivize companies to consider the fate of their products and spur innovation in material redesign.
According to one state analysis, 2.9 million tons of single-use plastic and 171.4 billion single-use plastic components were sold, offered for sale, or distributed during 2023 in California.
Similar laws have been passed in Maine, Oregon, Colorado, Minnesota, Maryland and Washington. Oregon’s law, however, is on hold while a lawsuit by the National Assn. of Wholesaler-Distributors works its way through the courts.
“We see a lot of the same problems in California that we flagged in Oregon,” said Clarke, the trade group spokesman. “Given California’s scale, the cost implications are going to be even larger. Our legal counsel has noted that California’s proposed fees are already higher than what other states have put forward.”
Jan Dell of Last Beach Cleanup, an anti-plastic waste group based in Laguna Beach, doesn’t believe the law will work — irrespective of the final regulations — and said the “exorbitant” cost of its implementation will either spur producers to sue, or they’ll end up passing the higher costs on to consumers.
She referred to a report from the Circular Action Alliance, the state-sanctioned group established to represent and oversee the implementation of the law on behalf of the plastic and packaging industry. It finds the law will increase the cost of disposal between six and 14 times for common products, such as Windex bottles, made of polyethylene terephthalate.
“If the producers don’t successfully sue to stop the fees, this will certainly add to product inflation for CA consumers,” she said in an email. “Californians already have to pay exorbitantly high curbside collection fees for trash, recycling, and organics … so, starting in 2027, our groceries will cost a LOT more but we won’t see a reduction in our waste bills.”
Christopher “Smitty” Smith, a partner at law firm Saul Ewing in Los Angeles, who councils companies and interest groups on SB 54 and other Extended Producer Liability laws, said that although he could see areas of the law that “could be sharper and avoid the legal challenges … you can’t stop people from suing.” Environmentalists and anti-waste activists say they are preparing a lawsuit.
Smith said the law already has sparked changes in how companies think and respond to concerns about waste.
One of his national fast-food chain clients has realized that if its brand name is on plastic packaging, it’s that company’s responsibility, he said, so “they’ve spent the past year mapping out their franchise agreements, their supply chain agreements, their producer agreements, to figure out” what it needs to do to comply.
He said in the past, companies have paid little attention to these details and just let their franchisees figure this kind of thing out. Now, they’re spending a lot of time and money “to wrap their arms around what their supply chain looks like and like, what post consumer use of their plastic products looks like and what their regulatory obligations are.”
It’s bringing a new dialogue within companies. And that, Smith said, is what could make this law so powerful.
Times staff writer Meg Tanaka contributed to this report.
Business
Sales Are Up. Celebrities Are In. Is Gap Officially Back?
At Gap’s headquarters in San Francisco, an archive dedicated to the apparel company’s 57-year history features nearly 6,000 boxes of memorabilia documenting the retailer’s brands, which also include Old Navy, Banana Republic and Athleta.
There are prints from photographers like Annie Leibovitz and material related to many celebrity ad campaigns, like Missy Elliott and Madonna for Gap and Cindy Crawford for Old Navy. Those dated back to the retailer’s heyday, when malls were full, celebrities wore the brand on red carpets and Gap stores were plot points in sitcoms like “Seinfeld.”
When Richard Dickson started as Gap’s chief executive nearly three years ago, he was awed by those archives and set out to change the conversation about the company.
Gap had spent years closing hundreds of stores across the United States, as sales flagged and profits were patchy. Its stock, which peaked in 2000, was languishing. The company took more than a year to fill the C.E.O. position.
Mr. Dickson, who spent nearly 20 years at Mattel, brought with him a playbook that had helped revitalize the toymaker’s brands like Hot Wheels and Barbie. He got Barbie to the big screen, with star power and a marketing machine that produced blockbuster financial results.
The native New Yorker speaks excitedly about the ways that fashion, entertainment and music are intertwined. He went to Coachella last month and has been to the Oscars in recent years. He often mentions how Gap’s first store, which opened in 1969 in San Francisco, sold records, tapes and jeans.
Mr. Dickson’s culture-focused strategy is taking root. For his creative director, he hired Zac Posen, who dressed Kendall Jenner in a Gap gown for the recent Met Gala. Gap has made toe-tapping ads featuring Katseye and Parker Posey. Mr. Dickson even hired another C.E.O. — a chief entertainment officer — to oversee the company’s push into content, licensing and Hollywood.
Gap’s comparable sales have risen for eight straight quarters, and its market value has increased to $8.5 billion, from $3.6 billion when Mr. Dickson started. Last year, Gap, Old Navy and Banana Republic posted sales increases, with only Athleta recording a decline. Gap’s namesake brand showed the strongest growth.
Mr. Dickson, 58, credits the turnaround to “being aware of pop culture, content, art, theater, music, entertainment.” If a brand makes sure that those themes come through, “you become more relevant,” he said.
This interview was edited and condensed.
As you try to bring Gap back into the cultural conversation, how are you managing your time? Are you spending more time in Hollywood?
As our business evolves, my allocated time also changes.
When I first got to the company, we were in “fix mode.” It’s no secret. My time was 100 percent spent on the operations, the financial rigor, setting up strategic priorities and editing a lot of the noise in the system that can be very distracting for a turnaround.
Over the course of three years, we’ve emerged a better company. Now we move into the next phase, which is to build momentum. My focus, while not taking my eye off the operational discipline, moves more into how to accelerate our growth.
I have a multitude of meetings and time spent with the entertainment community, which I’m very familiar with from previous roles.
When you were hired from Mattel, the chatter was that you would try to recreate the Barbie magic. Is that true, or is there a different strategy for Gap?
It’s actually the same playbook. It is not so much that the playbook is unique; it’s the methodology and the execution that’s unique.
The playbook is, first, identifying what’s our reason for being.
You could put me on any brand in the world. Why do you exist? What is our purpose? What’s our point of difference? Those simple questions have very complicated answers when you’re in a turnaround. If you can’t answer it in a sentence or two, or one or two words, you’ve got a problem.
Old Navy is different from Gap. Gap is different from Banana. Banana is different from Athleta.
So let’s focus on Gap. What makes it distinctive?
When I look at the history of every one of our brands — it wasn’t dissimilar to the Barbie conversation — what was it that broke through? What was that single thing that made it so incredibly relevant?
In our case, it was a store that was all-inclusive before inclusivity became a word, because we sold jeans for all races, all sizes, all sexes. We bridged the generation gap in the experience through music. Music was the connective tissue in the context of the store experience.
Let’s get back into that music narrative with great product storytelling and amplify it in a way that is relevant for today’s consumer. We started with Jungle with our linen campaign. We moved to Troye Sivan with a great music video around the baggy and loose trend. Then, of course, the blowout with Katseye.
These aren’t ads. Yes, you see the fleece because it looks incredible. But nobody’s saying, “Oh, my God, it’s a great deal with a great price.” They’re saying: “Did you see this? Did you feel this?” That is when you get emotional connection to a brand.
We had become more about price than product. More about stuff, not storytelling.
If you’re focusing on entertainment, how do you measure success?
We have dashboards everywhere. I think we just turned one off when you walked in because our business flashes on an hourly basis on my screens.
We have dashboards that measure brand love, people searching more for our brand and brand attributes that we test and roll out to see how consumers are feeling.
Does the focus on entertainment hedge against all of the uncertainty in the world?
To some extent, in the world that we live in, we should be that great distraction in some cases, that pleasant place that you love to go to. That ultimately makes a brand stronger, to essentially navigate more complex times. There’s always something that we have to worry about.
How worried are you about consumer spending? We’re in California right now. I passed a gas station where it was about $6 per gallon.
That was a good deal.
Most retailers say that consumers remain resilient, but are you prepared for spending levels to drop?
We have a fantastic portfolio that addresses all income cohorts.
We have quality products that should last, in some cases, for generations. You’re buying it for the long haul. But we do recognize that we need frequency: We need to stay fresh. We need to stay new.
There are a lot of businesses that will start to pull back on quality, right? We’re not.
You’re from New York City, right? Tell me about your upbringing.
My parents were both in retail, real estate and fashion. My mom was more on the creative side, and my dad was more on the financial and operations side.
My grandparents were also in fashion and retail. They were Holocaust survivors. My grandmother sewed and had her own line in department stores. My grandfather ran the factory, so they had a small business that did very well. I remember growing up and running around the factory floor.
What’s a piece of advice that you received that you still reflect on today?
Retail is detail. There’s not a single day where everything goes right, but at the end of that day you could still say that it was a great day.
Ultimately you’re firefighting on a minute-to-minute basis. You’re constantly in motion. That sense of detail orientation is probably an attribute that’s carried with me from my earliest days in the industry.
It’s time for the lightning round. What’s on heavy rotation on your music playlist right now?
Who I really like right now is Sombr. I saw him at Coachella.
What’s the last thing you asked A.I.?
To decipher an object that somebody sent me from a museum and I wanted to know which museum it was from.
How often do you check Gap’s stock price?
I probably check it twice a day. I do a morning check and at the end of the day.
When you need to feel most confident, what are you wearing?
I love our hoodies, and not only our fleece hoodies at Gap but Banana Republic’s cashmere hoodie. Depending on the vibe, I would go with a fleece or cashmere hoodie. Then I usually throw on a Banana Republic trucker jacket.
I wear all of our brands. I have worn a few sweatshirts from Athleta.
If you had to explain each of your brands in exactly one word, what would it be? Let’s start with Old Navy.
Family.
Gap?
Individuality.
Banana Republic?
Adventure.
Athleta?
I’m going to go with empowerment.
Business
Pressure grows on California attorney general to try to block Paramount’s deal for Warner Bros.
California Democrats in Congress are raising concerns about Paramount Skydance’s proposed takeover of Warner Bros. Discovery — a $111-billion deal that would dramatically reshape Hollywood by consolidating two historic film studios.
Rep. Laura Friedman (D-Glendale) and 33 other members of Congress on Thursday urged California Atty. Gen. Rob Bonta to scrutinize potential antitrust harms that would come from billionaire David Ellison’s proposed takeover of Warner Bros. Discovery — and possibly bring a legal challenge. The lawmakers’ campaign comes after more than 4,000 entertainment industry workers, including Jane Fonda, Ben Stiller and J.J. Abrams, signed an open letter calling for the deal to be blocked.
“We remain concerned that the proposed merger could harm California workers and consumers,” the 34 lawmakers wrote in their letter to Bonta. “We therefore respectfully urge you to closely analyze the potential effects of this merger, and, if you determine that this merger would have anticompetitive effects, use your best judgment to pursue the appropriate course of action.”
The deal, the largest Hollywood merger in nearly a decade, would bring together Warner Bros. and Paramount Pictures, streaming services HBO Max, Discovery+ and Paramount+, more than two dozen cable channels as well as CBS News and CNN. Paramount has said it expects the combination would bring at least $6 billion in cost savings, raising fears among the Democrats about widespread job losses.
Pressure is growing on Bonta to try to thwart Ellison’s proposed merger.
Bonta has previously told The Times his office is reviewing the proposed combination to determine whether it would harm consumers and industry competition. On Thursday, a spokesperson confirmed there was still “an active investigation,” into the proposed merger, but Bonta’s office had no “updates to share at this time.”
Bonta separately has brought a lawsuit with a bipartisan group of 13 state attorneys general to halt another merger — a massive consolidation of television stations by Nexstar Media Group — favored by President Trump.
The president wants to give more power to Nexstar, which owns network affiliate TV stations, to weaken ABC and NBC. In that case, a federal judge in Sacramento has issued a temporary injunction to freeze the merger until a trial to determine whether that deal violates century-old antitrust laws. Irving, Texas-based Nexstar is appealing the ruling.
Critics of the Warner Bros. deal are nudging Bonta to separately bring a lawsuit to block Paramount’s proposed takeover of its rival.
“Writers have seen merger after merger leave fewer and fewer companies in control of what our members can get paid to write,” Writers Guild of America West President Michele Mulroney said to make a case against the merger during a press briefing last month.
Warner Bros. Discovery shareholders have voted overwhelmingly in favor of the Paramount transaction that would pay them $31 a share.
Several U.S. senators, including Cory Booker (D-N.J.), also have sounded alarms, including about plans to bring sovereign wealth funds representing the royal families of Saudi Arabia, Qatar and Abu Dhabi into the deal as minority investors. Those Middle Eastern investors would hold a nearly 50% equity stake of the new company, although Paramount has said the wealth funds would not have board seats.
The Paramount-Warner Bros. transaction is expected to fly through its antitrust review at the U.S. Justice Department, in part, because billionaire Larry Ellison, who has agreed to backstop the financing for the deal, maintains close ties with Trump. Paramount has said it expects the deal to be completed before the end of September.
Rep. Laura Friedman at APLA Health, Michael Gottlieb Health Center in West Hollywood June 28, 2025.
(Myung J. Chun / Los Angeles Times)
Trump has agitated for changes at CNN, one of Warner’s most prominent properties. Ellison’s son David, who is chairman and chief executive of Paramount, hosted a party in Washington two weeks ago to honor Trump and other high-level cabinet officials, including some who have expressed a desire to see Ellison in charge of CNN.
“The proposed merger does not occur in a vacuum,” the lawmakers wrote. “Decades of consolidation in this industry have already resulted in reduced output, higher prices, fewer choices, and less innovation, while merged studios face few consequences for breaking their pre-merger promises.”
Paramount representatives, who did not immediately comment Thursday, have previously defended the proposed takeover.
David Ellison has also promised to maintain the two studios’ current release schedules of 15 movies a year — for a total of 30 films a year — following the merger.
“This is also a moment when the industry has been facing significant disruption — and the need for strong, creative-first and well-capitalized companies that can continue to invest in storytelling has never been greater,” Paramount has said, adding that it will follow through on its commitments to ensure that “creators have more avenues for their work, not fewer.”
The Congress members’ letter also called into question the Trump administration’s oversight, alleging there has been “unprecedented politicization of antitrust enforcement.”
“Given that we cannot have confidence that the Trump administration review of the merger will be conducted according to the law, and with the best interests of American workers and consumers in mind, it is even more vital that you conduct a thorough, independent review,” the lawmakers wrote in the letter to Bonta.
Federal regulators agreed to approve the Ellison family’s acquisition of Paramount last summer after Paramount agreed to pay Trump $16 million to settle a lawsuit he brought over edits to a CBS “60 Minutes” interview with Democratic nominee Kamala Harris prior to the 2024 election.
The proposed merger would saddle the combined company with $79 billion in debt, stoking fears that Paramount would be forced to make steep cost cuts to balance such a large debt load. In the last three months, Paramount lined up banks and other institutional investors to provide bridge financing to help pull off the transaction, the company said.
The letter from Friedman and the others noted that the film industry in Los Angeles already is almost on the ropes. Last summer, on-location production in the Los Angeles area declined by 13%. More than 42,000 film industry jobs were lost between 2022 and 2024, a period that included two labor strikes.
David Ellison, the chairman and chief executive of Paramount Skydance, attended President Trump’s State of the Union address in February as a guest of Sen. Lindsey Graham (R-South Carolina).
(Anna Moneymaker / Getty Images)
Friedman was joined by a group of prominent Democrats that includes Reps. Judy Chu (D-Monterey Park), Nancy Pelosi (D-San Francisco), Julia Brownley (D-Westlake Village) , Lou Correa (D-Santa Ana), Ro Khanna (D-Fremont), Ted Lieu (D-Torrance), Brad Sherman (D-Sherman Oaks), Maxine Waters (D-Los Angeles) and George Whitesides (D-Santa Clarita).
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