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Here Are Some "Simpsons" GIFs To Explain Trump's Announcement About New Tariffs

The news that the US will slap tariffs on steel and aluminum imports has a lot of countries and companies rattled.

Last updated on March 2, 2018, at 4:39 p.m. ET

Posted on March 1, 2018, at 6:17 p.m. ET

President Donald Trump made a surprise announcement on Thursday that there are going to be new tariffs on steel and aluminum coming in the near future.

The news came during a meeting with industry leaders at the White House, arranged while US government staffers are still crafting the policy.
Win Mcnamee / Getty Images

The news came during a meeting with industry leaders at the White House, arranged while US government staffers are still crafting the policy.

Before we go on, a quick Econ 101 refresher: A tariff is like a tax, but applied to goods as they enter a country. In theory, this encourages domestic production and consumption.

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That, in turn, makes domestic manufacturers — like the ones Trump met with Thursday in what was said to be a hastily arranged meeting — quite happy.

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The tariffs, Trump said, would be coming to him for signature sometime next week and would be sizable — a 25% tariff on steel and 10% on aluminum.

So that means that $100 worth of steel today would cost $125 to get over the border once the tariffs have been signed. Trump would make this change using authority granted to him under an obscure law that allows the president to impose tariffs for national security reasons."What's been allowed to go on for decades is disgraceful," Trump said at the meeting. "It's disgraceful. And when it comes to a time when our country can't make aluminum and steel — and somebody said it before, and I will tell you, you almost don’t have much of a country. Because without steel and aluminum, your country is not the same. And we need it.""We need it even for defense, if you think," he said. "I mean, we need it for defense. We need great steelmakers, great aluminum makers for defense."
Win Mcnamee / Getty Images

So that means that $100 worth of steel today would cost $125 to get over the border once the tariffs have been signed. Trump would make this change using authority granted to him under an obscure law that allows the president to impose tariffs for national security reasons.

"What's been allowed to go on for decades is disgraceful," Trump said at the meeting. "It's disgraceful. And when it comes to a time when our country can't make aluminum and steel — and somebody said it before, and I will tell you, you almost don’t have much of a country. Because without steel and aluminum, your country is not the same. And we need it."

"We need it even for defense, if you think," he said. "I mean, we need it for defense. We need great steelmakers, great aluminum makers for defense."

But the news that new tariffs were coming left a lot of other countries and companies...less than pleased, shall we say.

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The biggest problem for foreign countries is that the US consumes a LOT of aluminum and steel — according to the US Commerce Department report that preceded Trump's announcement, the US imports four times more steel than it exports. So countries that produce more of these metals than they can use gladly sell the excess to US companies.

That brings us to the problem US companies have, which is, for many of the biggest companies, the domestic steel and aluminum markets aren't able to handle the demand at a price they feel is profitable.

And the worry is that countries affected by the tariffs would then enact their own tariffs on US exports in retaliation, potentially spiraling into an all-out trade war.

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Within hours of Trump's announcement, Canadian Foreign Minister Chrystia Freeland issued a fiery statement, warning that any restrictions on Canada's steel and aluminum would be "absolutely unacceptable."

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“The United States has a $2 billion surplus in steel trade with Canada," Freeland said in her statement, slamming the claim that the tariff was needed for national security reasons. "Canada buys more American steel than any other country in the world, accounting for 50% of US exports."

“We will always stand up for Canadian workers and Canadian businesses," she wrote. "Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers.”

The United Kingdom's statement was a bit less intense, but still not onboard with the US's position.

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"We have been clear that we are particularly concerned by any measures that would impact the UK steel and aluminium industries," a UK government spokesperson said. “Overcapacity remains a significant global issue and we believe multilateral action is the only way to resolve it in all parties’ interests.”

The European Union also had harsh words for the announcement. "We strongly regret this step, which appears to represent a blatant intervention to protect US domestic industry and not to be based on any national security justification," President of the European Commission Jean-Claude Juncker said in a statement. "We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk."

The EU on Friday threatened to pull the trigger on tariffs on imports of US bourbon, blue jeans, and Harley-Davidson motorcycles in response.

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The announcement also potentially disrupted efforts to hold off a trade war with China, whose companies will be hit hard by the tariffs.

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A delegation of US and Chinese negotiators — including Liu He, the Communist Party's most powerful economic official, according to the LA Times — were in Washington on Thursday in trade talks. The tariff announcement likely won't be great for those negotiations.

On the corporate side, US beer maker MillerCoors issued a statement Thursday condemning the move and warning that jobs could be lost as a result.

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"Like most brewers, we are selling an increasing amount of our beers in aluminum cans, and this action will cause aluminum prices to rise," the statement read. "It is likely to lead to job losses across the beer industry."

And on Friday after Commerce Secretary Wilbur Ross held up a can of Campbell's soup on CNBC to defend the tariffs, the soup company struck back.

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"Any new broad-based tariffs on imported tin plate steel — an insufficient amount of which is produced in the US — will result in higher prices on one of the safest and more affordable parts of the food supply," a spokesperson told Business Insider.

The stock market also reacted poorly to the announcement, plunging 500 points within hours of the White House meeting.

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The market ended up closing 420 points down with the slide continuing throughout Friday trading.

Trump may not even be able to count on his party for support, with several Republicans — including Sen. Ben Sasse and Speaker of the House Paul Ryan — coming out against the measure.

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Like we said at the beginning, the policy is still in the process of being crafted, which makes it hard to predict exactly what the results on the US economy will be if it's put into place. But based on the reaction so far, other countries aren't going to let it slide — and that's probably not great for the US.

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