Yale Budget Lab Executive Director Martha Gimbel Talks Tariffs

Summary

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Bloomberg Talks: Yale Budget Lab Executive Director Martha Gimbel Talks Tariffs

Episode Air Date: April 2, 2026
Guest: Martha Gimbel, Executive Director, Yale Budget Lab
Host(s): Bloomberg Interview Team

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Episode Overview

This episode of Bloomberg Talks features Martha Gimbel, Executive Director at the Yale Budget Lab, for an incisive conversation on the current landscape of U.S. tariffs. The discussion dives into the economic effects of the latest round of tariffs, who is burdened by these costs, policy motivations, and how the consequences are unfolding for businesses and consumers. Martha Gimbel brings data-driven clarity, comparing today’s environment to historic tariff regimes and pulling back the curtain on policymaker motivations.

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Key Discussion Points & Insights

1. Historical Perspective: Tariff Impact in Context

• (00:34–00:58)
  The host challenges whether current U.S. tariff rates mirror the pre–World War II era, specifically referencing 1939.
  • Martha Gimbel: “So it’s about 1943, but you know, 1939, 1943. What’s a couple of tariff rates between friends at this point? Right. It’s high, I think is the real point.” (00:58)
• Gimbel uses humor but underscores that tariffs are the highest in decades, linking today’s environment with FDR–era levels.

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2. Consumer Impact: Rising Prices Beyond Gas

• (01:09–01:20)
  The host pivots to the real-world impact on listeners coping with high gas prices.
  • Martha Gimbel: “...you’re still going to see continually rising prices. One of the things that we've been talking about is trying to figure out how much of the tariffs have actually been passed through already...easiest number to kind of fixate on is around 50%. It's not exact, but gives you an idea. And so you know, you still have costs that are waiting to hit the consumer again at the same time that you're obviously seeing a lot of pressure from energy prices.” (01:20)
• Team Recognition:
  Gimbel credits her team’s dedication in analyzing how tariffs on metals affect other sectors, like dairy, demonstrating the broad consequences and ongoing analysis.
  • “...the team was up late last night like incorporating new ways of how they realized metal tariffs impact dairy. So I do just want to say, you know, this is a team that is always iterating, always trying to make sure they're doing this exactly right.” (01:48)

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3. Who Bears the Tariff Burden?

• (02:12–02:29)
  Co-host asks who is shouldering the costs: exporters, importers, companies, or consumers?
  • Martha Gimbel: “So at this point it’s probably, you know, partially consumers. You know, prices for, for instance, for durable goods do look like they've been affected. You've also seen companies trying to hold on, right? ... They’ve been trying to hold on, but at some point the economic pressures become too much and then they have to raise prices.” (02:29)
• Gimbel notes companies’ reluctance to pass on costs, but economic pressure is forcing gradual price hikes.

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4. Tariff Policy Outlook: Temporary Measures and Uncertainty

• (02:57–03:14)
  Where are policymakers headed? Co-host prods about the administration’s resolve and the durability of tariffs.
  • Martha Gimbel: “I mean, I think, you know, at the moment we have these kind of temporary tariffs in place while they figure out the new legal authorities they're going to be using. ... Let’s call it somewhere between 11 and 15%. But if you're a business, that actually doesn't help you very much. ... You need to know what the effective tariff rate is for your industry, for your products. And there we just know certainty. Don’t know which products are going to—” (03:14–03:48)
• Gimbel highlights the uncertain environment for businesses — headline tariff rates don’t match ground-level complexity.

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5. Fiscal Dependency on Tariff Revenues

• (03:48–04:14)
  The host asks if the U.S. is now “addicted” to revenue from tariffs, given budget pressures from war spending and defense.
  • Martha Gimbel: “I think you're asking the question that a lot of people are starting to kind of whisper to themselves, right? It’s really, really hard to raise taxes in D.C. Economists would tell you raise literally any tax except for tariffs, right? They're really inefficient ... At the same time, it seems to be the only tax that we're able to raise.” (04:14)
• Gimbel points out the political convenience but economic inefficiency of tariffs as a revenue source.

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6. Stage of Tariff Effects: Early Innings

• (05:16)
  Using a baseball metaphor, the host wonders if we’re nearing the end of tariff-induced disruption.
  • Martha Gimbel: “We’re not even at the seventh-inning stretch. You know, we're, you know, only just starting to get there. ... It’s not the case that you raise tariffs and the effects of those are fully incorporated the next day, especially when those tariffs have been so uncertain as these have been. No, we have no idea what's going on.” (05:16)
• The effects are just beginning; it could take years for the full impact to unfold.

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Notable Quotes

• Martha Gimbel (on historic comparison):
  “So it’s about 1943, but you know, 1939, 1943. What’s a couple of tariff rates between friends at this point? Right. It’s high, I think is the real point.” (00:58)

• Martha Gimbel (on price transmission):
  "It’s probably, you know, partially consumers ... companies don’t like raising prices if they don’t have to ... at some point the economic pressures become too much and then they have to raise prices.” (02:29)

• Martha Gimbel (on policy challenges):
  "Economists would tell you raise literally any tax except for tariffs, right? They’re really inefficient. ... At the same time, it seems to be the only tax that we're able to raise.” (04:14)

• Martha Gimbel (on where we are in the tariff cycle):
  “We’re not even at the seventh-inning stretch ... It’s not the case that you raise tariffs and the effects of those are fully incorporated the next day, especially when those tariffs have been so uncertain as these have been.” (05:16)

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Timeline Highlights

• 00:34: Host sets the stage with contemporary and historical tariff comparisons.
• 01:09: Consumer impact amid high energy costs.
• 02:12: Breakdown of who is paying for tariffs now.
• 02:57: Probing administration motives and future policies.
• 03:48: Discussion on fiscal dependency.
• 05:16: Long-term horizon for tariff effects.

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Tone and Takeaways

• Tone: Clear, data-driven, with approachable analogies and a touch of humor from Gimbel.
• Key Takeaway:
  • Tariff policy is high and evolving, with businesses and consumers both feeling the pinch.
  • The U.S. political system finds tariffs an expedient but economically inefficient tool for raising revenue.
  • We are still in the early stages of experiencing the full effects of these tariffs; impacts will continue to unfold in the coming years.

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Martha Gimbel and her team at the Yale Budget Lab continue to provide critical clarity amidst economic uncertainty, underscoring the importance of granular analysis as policy and its impacts evolve.

Transcript

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[Economist/Analyst]

Bloomberg Audio Studios podcasts,

[Host/Interviewer]

Radio news Martha Gimbel, Executive director at the Yale Budget Lab and Martha, I want to get back to tariffs because it's been pushed completely aside. We'll get to the war and oil in a moment. What is your run rate now of tariffs? Do I do I believe you're back to 1939 on the tariff impact.

[Economist/Analyst]

So it's about 1943, but you know, 1939, 1943. What's a couple of tariff rates between friends at this point? Right. It's high, I think is the real point.

[Host/Interviewer]

What do we say about the impact on our listeners and viewers distracted by five dollar a gallon gas?

[Economist/Analyst]

I mean, you're still going to see continually rising prices. You know, one of the things that we've been talking about is trying to figure out how much of the tariffs have actually been passed through already. I think the sort of back of the envelope, easiest number to kind of fixate on is around 50%. It's not exact, but gives you an idea. And so you know, you still have costs that are waiting to hit the consumer again at the same time that you're obviously seeing a lot of pressure from energy prices. By the way, Tom, I just wanted to, you know, you were talking about the team just as a measure of the dedication of the team. The team was up late last night like incorporating new ways of how they realized metal tariffs impact dairy. So I do just want to say, you know, this is a team that is always iterating, always trying to make sure they're doing this exactly right. And I just want to give them a huge, huge shout out.

[Co-Host/Interviewer]

Martha, what's the given that we have a one year kind of perspective here, what's kind of the layout of who really bore these tariff expenses, whether it be the exporter, the importer companies, consumers. How's that shaking out now?

[Economist/Analyst]

So at this point it's probably, you know, partially consumers. You know, prices for, for instance for durable goods do look like they've been affected. You've also seen companies trying to hold on, right? Because there's been so much uncertainty about these tariffs and companies don't like raising prices if they don't have to. Right. Makes consumers mad. And so they've been trying to hold on, but at some point the economic pressures become too much and then they have to raise prices.

[Co-Host/Interviewer]

So where do we think we go from here? Give us a sense of how constructive or how adamant the administration is in terms of imposing these tariffs. Have they been really on top of it, do you think?

[Economist/Analyst]

I mean, I think, you know, at the moment we have these kind of temporary tariffs in place while they figure out the new legal authorities they're going to be using. I think one thing that's really hard is that at this point, I think we have a pretty good sense of what the headline tariff number is going to be. You know, let's call it somewhere between 11 and 15%. But if you're a business, that actually doesn't help you very much. You don't need to know what the headline, you know, you and I care. You need to know what the effective tariff rate is for your industry, for your products. And there we just know certainty. Don't know which products are going to

[Host/Interviewer]

be targeting to get all McKinley on you and the President would say this. You estimate we're raising 9 00, just under $1 trillion out x number of years. By all of this, with the war, with the massive Pentagon budget, are we addicted whether we agree or disagree with tariffs, are we now addicted to that tax cash flow?

[Economist/Analyst]

I mean, I think you're asking the question that a lot of people are starting to kind of whisper to themselves, right? It's really, really hard to raise taxes in D.C. economists would tell you raise literally any tax except for tariffs, right? They're really inefficient. They have really high economic costs. At the same time, it seems to be the only tax that we're able to raise.

[Host/Interviewer]

Well, to Paul's good question. Before given all the distractions, folks, the screen that I'm seeing here, I just saw the House will not vote on the DHS thing. Ed Ludlow just sent me how the Orion mission is going to go from 17,000 miles per hour to 24,000 miles per hour. Going to have Ludlow on in the nine o' clock hour. I mean, all these distractions. Martha. What On a baseball sense, think Ron Darling at Yale years ago. On a baseball sense, Martha Gimbel, where are we in the tariff impact? Are we like. I think there's a feeling we're in the ninth inning. I don't buy it. Where are we in the tariff effect?

[Economist/Analyst]

We're not even at the seventh inning stretch. You know, we're, you know, only just starting to get there. You have to remember, Moot Hawley took years to, you know, fully incorporate. And this is it's not the case that you raise tariffs and the effects of those are fully incorporated the next day, especially when those tariffs have been so uncertain as these have been. No, we have no idea what's going on.

[Host/Interviewer]

I'll get it out on LinkedIn and Twitter as well. It's the budget lab at Yale. I can't say enough about the clarity and the succinctness of it. Martha Gimmel there with a great team.

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