Many foreign companies left Russia after Russia invaded Ukraine in 2022. Big U.S. companies like Coca-Cola, Nike, Starbucks, ExxonMobil, and Ford also left. But now, after more than three years of fighting, U.S. President Donald Trump said that trade between the U.S. and Russia could start again if there is a peace deal. Russian President Vladimir Putin also said some foreign companies might be allowed to come back.
Trump said, “Russia wants to trade a lot with the U.S. when this terrible war is over. Russia has huge potential to create many jobs and wealth.” But after recent attacks on Kyiv, Trump called Putin “crazy” and warned about more sanctions. Putin also warned Western companies not to try to get back their businesses easily. This shows that it won’t be simple for companies to return to Russia.
Read More: U.S. Steel Imports to Face 50% Tariff Under New Trump Plan Starting June 4
Since 2022, Russia’s business rules have changed a lot, mostly in ways that make it harder for foreign companies. The war is still going, and peace seems far away. Here are some reasons why U.S. companies might not come back:
- Risk of losing everything: Russia sees countries that support Ukraine, like the U.S., as “unfriendly.” This means there are strict rules that limit what foreign companies can do. For example, they can’t easily take their money or equipment out of Russia. The Russian government can take control of companies it thinks are important. Even votes from foreign owners on company boards might be ignored.
- Companies that left Russia had to sell their businesses for very low prices or just give them up. Friendly Russian businesses bought these companies cheaply. The government took control of some foreign companies, like Finland’s Fortum, Germany’s Unipro, France’s Danone, and Denmark’s Carlsberg.
- Even if a peace deal happens and the U.S. is no longer considered “unfriendly,” and if sanctions are removed, companies remember these big losses. And right now, it doesn’t look like those changes will happen soon.
Experts say that while Russia talks about companies returning, no big company has said it’s ready to come back. The damage to Russia’s business environment is serious and lasting.
Putin also said Russia needs to block big tech companies like Zoom and Microsoft, which cut their services in Russia after the invasion. He wants Russian tech companies to grow instead. Putin promised to help the Russian company that took over McDonald’s restaurants if McDonald’s tries to come back. McDonald’s said in 2022 that owning the business in Russia was no longer possible.
Also See: US Supreme Court Allows Trump to End Legal Status for 500,000 Immigrants
The Russian economy is expected to grow very slowly because investment is mainly going into the military, not other businesses. Experts say Russia has one of the worst combinations of low growth and high risk in the world. Most profits would come from military-related work, but U.S. companies would not want to be involved in that.
Some companies like Renault and Ford left with deals to buy back their businesses later if things get better. But Russia’s unstable laws make it hard to trust those deals.
What about oil and gas? Big oil companies lost money when they left Russia. ExxonMobil lost $3.4 billion after losing its stake in a big Russian oil project. Russia’s big oil companies don’t need foreign partners as much anymore, but smaller companies might want to come back. They would have to meet new rules about investing locally.
Not all foreign companies left. According to experts, over 2,300 foreign companies still work in Russia, many from countries not supporting Ukraine, like China. About 1,300 companies are in the process of leaving, and nearly 500 have left completely. Some U.S. companies still do business there, but many have stopped new investments.
Even if the U.S. lifts its sanctions, the European Union (EU) is still adding new sanctions on Russia. So, companies that want to do business in both Russia and Europe would face many legal problems.
