The European Commission's proposed steel replacement measure is likely to exacerbate the decline in the share of household appliances made in the EU in total EU sales, as factories in the EU close and capacity in third countries and imports from third countries increase, warns APPLiA, an association representing manufacturers of household appliances in Europe.
The association's members annually produce about 65 million large household appliances directly in the EU. While the European market for large household appliances has expanded since 2021, the share of European-made household appliances in total sales in the EU decreased by 5% in 2024, the report notes.
"The precautionary measures provided for in the Commission's proposal may lead to shortages of certain types of steel, thereby increasing production costs and negatively affecting the competitiveness of the industry," the association said in a statement reviewed by Callanish. "Although this proposal is presented as a general precautionary measure, its impact varies. It places a strong emphasis on supporting European steel producers, while virtually ignoring the negative impact on producers involved in processing."
With the current capacity, European steel production cannot meet domestic demand at a competitive price. Steel accounts for 46% of the materials in the products of the association's members, and "creating an artificial shortage" will lead to a significant increase in primary production costs, she continues.
The application proposes to maintain existing non-quota duties; introduce quotas on an annual basis and reintroduce a transfer mechanism; increase transparency in quota allocation; and ensure adequate quotas for steel categories that are not produced in sufficient quantities in the EU. It also suggests reviewing this measure on an annual basis, using criteria related to quota exhaustion, supply chain impacts, and damages for subsequent use.
Finally, it warns that the "melt and pour" rule will lead to administrative and financial burdens and uncertainty in the supply chain, in addition to the already limited quotas.
Paulina Weintzirl, head of trade and industrial policy at Directorate E of the European Commission's Directorate for Trade and Economic Security (DG Trade), said this week that during consultations on trade measures, steel consumers recognized the need to provide protection for domestic steel producers upstream.
Adam Smith Austria
Kallanish.com
