Voest boss on tariffs

“Critical of the escalation of the trade wars”

In Cairo, voestalpine produces high-speed turnouts for the expansion of the Egyptian railroad network.

(Bild: Voestalpine)

25 percent on steel and aluminum imports to the USA: these are the tariffs imposed by President Donald Trump, which could put Europe's industry under enormous pressure. CEO Herbert Eibensteiner recently revealed how voestalpine is dealing with the issue of trade barriers. Helpful: The steel giant from Linz (Upper Austria) also produces directly in the USA.

"The USA is a very, very important market for us," confirmed Herbert Eibensteiner a few weeks ago, when Donald Trump's tariff announcement on steel and aluminum was only a few hours old.

From Wednesday, March 12, the measures pushed for by the new US president are set to become reality - although it is ultimately impossible to say whether this will actually happen and whether imports into the United States will be subject to a 25 percent tariff. The fact is: "We supply many high-quality products, some of which are not available on the American market. This gives us a very good market position," says Eibensteiner, "from voestalpine's point of view these tariffs are manageable.

We produce well over half of our products for the American market locally. The focus on this local production avoids the risk of tariffs. Deliveries to the USA account for around two to three percent of Group revenue.

Herbert Eibensteiner, voestalpine-Vorstandschef

Bild: Voestalpine

"We are critical of the escalation of the trade wars, as they drive inflation and are likely to have a dampening effect on growth. The tariffs imposed on steel and aluminum will certainly lead to a further weakening of the competitiveness of European industry," the manager of the Linz-based steel and technology group is convinced.

In recent years, voestalpine has invested three million euros in expanding its welding technology expertise in India.

(Bild: voestalpine)

Even though the company employs 23,600 people in Austria and claims to generate 1.25 percent of tax revenue in the Alpine republic, and has invested EUR 5.6 billion over the last ten years, money is increasingly flowing into setting up production facilities and the like outside the country's borders. "We have stipulated in our strategy that we want to deliver more 'local for local'. The issue of trade barriers is nothing new for voestalpine, nothing new for internationally active companies. Where it makes sense, we will invest locally and also produce totally locally," says Eibensteiner.

3000 employees in the USA
voestalpine has 49 sites in the USA, where it employs around 3000 people: "In recent years we have successively expanded local value creation there, which of course significantly reduces the customs risk." For example, the production and sales capacities for the American market relating to high-bay warehouses are being relocated from the Czech Republic to Louisville.

Other examples of "local for local"? In the field of welding technology, three million euros have been invested in the expansion of production in India in recent years. A solid wire production facility is also to be built there. A local production facility for high-speed switches has been set up in Cairo. The Railway Systems division is supplying around 260 turnouts, including maintenance software, for the first Egyptian high-speed line called the "Green Line".