APPLiA expresses concern over the ‘Proposal Addressing the Negative Trade-Related Effects of Global Overcapacity on the Union Steel Market’

APPLiA, the trade association representing the European home appliance industry,  expresses serious concerns towards the new Proposal Addressing the Negative Trade-Related Effects of Global Overcapacity on the Union Steel Market so-called steel safeguards. Our members represent a significant EU industrial footprint, producing nearly 65 million large appliances directly within the European Union annually. While the European large household appliances market has expanded since 2021, the share of EU-produced appliances in total EU sales fell by 5% in 2024, indicating a worrying trend that is expected to be exacerbated by the proposed steel safeguard measures. Our industry is already reporting plant closures in the EU and expanding capacity in and import from third countries. Doubling the out-of-quota tariff to 50% could accelerate that trend.

The safeguards as envisioned in the Commissions' proposal risk creating shortages of certain types of steel thereby increasing production costs and negatively affecting industry competitiveness. While presented as a general safeguard the proposals impacts are uneven. It places strong emphasis on supporting the European steel producers with almost no consideration of the negative impact on downstream manufacturers. At current capacity, European steel production cannot meet domestic demand at a competitive price. Steel accounts for almost half (46%) of the materials in our products and creating artificial scarcity will significantly cause an increase in our primary production costs.

Our main messages:

• • Maintain the current out-of-quota duties: The tightening of the quotas and the increase of the out-of-quota duty from 25% to 50% will lead to cost increases which will hurt European downstream industries competitiveness severely. A more limited reduction of the quota volumes should instead be combined with maintained out-of-quota duties at the current level.
  • Administer quotas on a yearly basis and reintroduce a carry-over mechanism: An annual process to renew quotas, instead of the proposed quarterly process, would reduce the risk of quota exhaustion, and thereby simplify production and supply chain planning. A reintroduction of a limited carry-over mechanism would further prevent disruption in the supply-chain.
  • Improve  transparency on quota allocation: There is a lack of clarity on how the 18.3 Mt will be split by country and types and when details will be released, hindering planning, cost forecasting, and procurement. 
  • Uneven impact on steel types: The deepest constraints fall on processed materials (e.g., stainless and CRC), with an already common rapid quota exhaustion already common; EU mills do not cover downstream demand at required volumes and prices.  The system must ensure adequate quotas for steel categories which are not manufactured in sufficient volumes in the Union. 
  • Review mechanism: Welcome in principle, but reviews should be made on an annual basis; APPLiA proposes criteria tied to quota exhaustion, supply-chain impact, and downstream harm, enabling faster adjustments for high-demand, low-supply types.
  • Melt & Pour requirement: Introduces administrative and financial burdens and supply-chain uncertainty atop already tight quotas.