Trump is luring U.S. Steel from Košice back to the States

Rumours have circulated for some time that the Košice plant of the U.S. Steel corporation could change owners. Now, the initiative of new US President, Donald Trump, makes these rumours even more acute.

U.S. Steel in KošiceU.S. Steel in Košice(Source: TASR)

The steelworks in Košice, currently owned by U.S. Steel, could change hands soon. The firm, which employs over 10,000 people in the east of Slovakia and indirectly via sub-suppliers a further 2,000, has been pondering a departure from Slovakia for some time. One of the reasons is the financial problem caused by cheap Chinese steel imported to Europe, the Pravda daily wrote on January 23.

Another reason is Donald Trump, who is luring investors to return to the country with various tax reliefs. Trump promised to reduce the corporate tax in the US from the current 35 percent to 15 percent, and to stop new and abolish old red tape burdening the firms. He also plans to impose a corporate tax of 41 percent on US companies operating abroad.

US investments in Europe expected to be withdrawn

Economic analysts say that Trumps’ policy of imposing customs on products imported to the US will have serious impacts in the case of the country’s investments on the European continent. Trump openly declared he wants US firms to return home. The firms may need money to expand their US investments, which they may get by selling their activities abroad.

"With Trump, the chance of selling the plant to another owner has increased considerably in the case of U.S. Steel Košice," economist of the Finlord company, Boris Tomčiak, opined for Pravda. “The mother company U.S. Steel wants to focus mostly on the American market.”

U.S. Steel negotiated the sale of its Košice steelworks already last autumn but Chinese, Czech and also Russian potential buyers refused to pay the price demanded, citing low prices of steel as the reason. After the EU imposed customs on Chinese steel, however, the price of this commodity has started to rise and thus the price of Košice steelworks may also increase, according to Pravda.

This should, however, not have a fundamental impact on the whole Slovak economy, Tomčiak told Pravda.

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Theme: Industry


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