Nobel Prize winning economist warns of economic crisis from 'showman' Trump's tariffs

Shiller, who described President Trump as a "showman" who "obviously relishes" celebrity status, warned that the threat of a new round of tariffs from either side would risk stalling business investment which could potentially instigate an immediate economic downturn.

Former vice president of the American Economic Association Shiller said: "The immediate thing will be an economic crisis because these enterprises are built on long-term planning, they've developed a skilled workforce and ways of doing things. We have to rediscover these things in whatever country after the imports are cut off. It's just chaos: It will slow down development in the future if people think that this kind of thing is likely."

On Friday, Beijing stated that it may move to target 128 US products with a total import value of $3bn, including wine, fruit and steel pipes, in response to President Trump’s executive order which imposed broad duties on foreign aluminium and steel imports.

Previously, the White House has moved to impose tariffs on up to $60bn-worth of Chinese imports.

"If he did this during 2009 it would have been catastrophic. But I think his timing is just his own personal timing for this: He's been president for a year, it's about time he does something that gets people's excitement going. He has a philosophy of life that that's what you have to do: If you want to stay famous, celebrity - which he obviously relishes - you've got to be constantly creating news," said Shiller.

Shiller cited tariffs introduced in the Great Depression as the a source of comparison and concern and questioned the competence of members of the Trump administration such as White House trade advisor Peter Navarro who has written books such as "Death by China" and "The Coming China Wars".