The Nobel-winner has warned of an economic crisis amid the heightened tensions between the United States and China over heavy tariff threats from both sides, saying that US companies were not prepared to have China forced out of their supply chains.
"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," Shiller told CNBC.
He proceeded to say that there might not be a significant effect to the US from steel and aluminum tariffs, although the heated rhetoric from both nations could lead to economic recession in the United States.
President Trump recently signed a memo imposing $60 billion in extra tariffs on Beijing over allegations of intellectual theft. China, being the world’s largest importer of waste, retaliated, refusing to lift its ban on the import of foreign garbage, thus making Washington look for alternatives to dispose of trash.