Chapter 1: What is the main topic discussed in this episode?
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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 on oil in a moment. What is your run rate now of tariffs? Do I believe you're back to 1939 on the tariff impact?
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.
What do we say about the impact on our listeners and viewers distracted by $5 a gallon gas?
I mean, you're still gonna 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. 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 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, you were talking about the team. Just as a measure of the dedication of the team, the team was up late last night, incorporating new ways of how they realized metal tariffs impact dairy.
So I do just want to say, 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.
Martha, 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 is that shaking out now?
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Chapter 2: What are the implications of President Trump's tariffs?
And so, you know, they've been trying to hold on, but at some point the economic pressures become too much and then they have to raise prices.
So where do we think we go from here? Give us a sense of how constructive or how adamant that administration is in terms of imposing these tariffs. Have they been really on top of it, do you think?
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. We don't know which products are going to be targeted.
To get all McKinley on you, and the president would say this, you estimate we're raising 9-0-0, just under a trillion dollars 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?
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.
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. We're going to have Ludlow on in the 9 o'clock hour. I mean, all these distractions, Martha.
On a baseball sense, think Ron Darling at Yale years ago. On a baseball sense, Martha Gimbel, where are we in the tariff impact? I think there's a feeling we're in the ninth inning. I don't buy it. Where are we in the tariff effect?
We're not even at the seventh inning stretch. We're only just starting to get there. You have to remember, Moot Holly took years to 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.
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Chapter 3: How are current tariffs affecting consumer prices?
It's the Budget Lab at Yale. I can't say enough about the clarity and the succinctness of it. Martha Gimbel there with a great team.
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