• Nobel Prize-winning economist Robert Shiller warned that businesses could take a 'wait and see' approach to increased trade tensions between the U.S. and China.

• "It's exactly those 'wait and see' attitudes that cause a recession," he warned.

• "It's just chaos: It will slow down development in the future if people think that this kind of thing is likely," he told CNBC at the annual China Development forum in Beijing.

A ramp up in U.S.-China trade tensions — which many are predicting in the wake of a new round of tariff threats from both sides — would immediately result in an economic crisis, according to Nobel Prize-winning economist Robert Shiller.

The Yale economist criticized U.S. President Donald Trump during a Saturday interview in Beijing, calling the U.S. commander-in-chief "a showman" who "obviously relishes" celebrity, but acts in a way that's "totally unbecoming for a president."

But he saved his strongest critique for the apparently increasing likelihood of a trade war between the U.S. and China. U.S. companies, he warned, are not prepared to have China cut out of their supply chains or business models.

"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," he told CNBC at the annual China Development Forum .

"It's just chaos: It will slow down development in the future if people think that this kind of thing is likely," he added.

Perception becomes reality

Beijing on Friday said it may target 128 U.S. products with an import value of $3 billion in response to President Donald Trump executive order earlier this month that imposed broad duties on foreign aluminum and steel imports.

The U.S. president had also announced tariff plans for up to $60 billion in Chinese imports , although China didn't officially connect its Friday threats of retaliation to that White House action.

The U.S. goods threatened by Beijing include wine, fresh fruit, dried fruit and nuts, steel pipes, modified ethanol, and ginseng, the ministry said. Those products could see a 15 percent duty, while a 25 percent tariff could be imposed on U.S. pork and recycled aluminium goods, according to an official statement.

Shiller said he did not believe there would be a significant inflationary effect to the U.S. from steel and aluminum tariffs, but he warned that heated trade rhetoric from both sides could send the American economy reeling into a recession.