SALT LAKE CITY — President Donald Trump’s impending tariffs on certain imported metals has been an interesting talking point in the business, economics and political communities since it was first announced on March 1.

That announcement led to backlash and fear of a “trade war,” with multiple countries across the world threatening to impose tariffs on U.S. exports and local businesses and politicians wary about it. Trump announced last week that a 25-percent tariff would be applied to steel and a 10-percent tariff would be applied to aluminum imports by the end of March. Countries like Canada, Mexico and Australia were exempted from the initial tariff plan.

Though Trump used a clause of the Trade Expansion Act of 1962 that allows a president to make the tariffs based on national security, according to Reuters, part of the rationale given for the tariffs has been related to the U.S.’s trade deficits with other countries. A trade deficit is created when a country imports more than it exports.

Trump has referenced the U.S.’s $337 billion trade deficit with China in 2017 when discussing the issue, as well as deficits with the European Union.

“The European Union, wonderful countries who treat the U.S. very badly on trade, are complaining about the tariffs on Steel & Aluminum. If they drop their horrific barriers & tariffs on U.S. products going in, we will likewise drop ours,” Trump tweeted on Saturday.

Related:

Trump orders stiff trade tariffs, unswayed by grim warnings

Unswayed by Republican warnings of a trade war, President Donald Trump ordered steep new tariffs on steel and aluminum imports to the U.S. on Thursday, vowing to fight back against an "assault on our country" by foreign competitors.

So why does the U.S. have such a glaring gap in trade deficits with so many countries in the world? It mainly comes to two things: The U.S. consumes more than it produces and other countries are producing goods at a cheaper cost.

“The excess of imports coming into a country essentially replaces manufacturing that could have been produced here in the United States. You can think of the imports as replacements,” explained Stephen Bannister, an assistant professor at the University of Utah’s Department of Economics.

Here’s another way of looking at it.

In a March 6 episode of NPR’s “Marketplace,” program reporter Ryan Kailath likened world trading to a sandwich. A person could buy all the materials to make a sandwich themselves, but in many cases, it might be more efficient to buy a sandwich from a restaurant. However, instead of a sandwich, countries import goods from other countries because it’s cheaper and easier than producing those goods entirely by themselves.

Bannister said on an elementary level of economics that would mean American jobs are being replaced. However, he added the global economy is much more complex than that. Many products are now comprised of pieces built or assembled in different countries, known as global supply chains.

“In a finished product that a consumer buys, you may have parts that are both imports and exports from several countries before that final good is produced,” he said. “That complicates things a great deal.”

Are trade deficits a bad thing? Well, that’s complicated.

Globally, the deficit has also helped other countries move out of poverty since the U.S. began growing a trade deficit in the mid-1970s, Bannister said. However, the deficit means it’s possible that jobs are going overseas because the U.S. is importing materials from other countries than the U.S.

That said, Bannister points out a growing amount of manufacturing jobs are being lost to automation, and, since this isn’t a new issue, he added many people have moved on to other fields for work and the unemployment rate hasn’t been affected much by the deficit.

“In the era of globalization and when we get to the way the real world works, it’s a much more complex picture,” Bannister said. “It’s not clear that, especially in the U.S., that having some level of trade deficit is a bad thing. … so, if you’re concerned about global poverty and many growth economists are, the U.S. needs to find a tolerable level of running trade deficits from those countries.”

It’s far too early to tell if the tariffs will benefit or harm the U.S. economy, but one thing is for sure: The U.S. trade deficit will likely remain after the tariffs are enacted.

Related topics