China doesn't want trade war with US, its 'very best customer': Analyst

  • Fears of a trade war with China may be spooking investors, but analyst Alan Tonelson says he doesn't see that happening.
  • Trump slapped retaliatory tariffs on up to $60 billion of Chinese imports on Thursday.
  • Tonelson says he hasn't seen any indication so far of "serious Chinese intent to retaliate in any significant way."

Fears of a trade war with China may be spooking investors, but analyst Alan Tonelson told CNBC on Thursday he doesn't see that happening.

Earlier in the day, President Donald Trump signed an executive memo that slaps retaliatory tariffs on up to $60 billion of Chinese imports.

The Chinese embassy released a statement late Thursday saying China "would fight to the end ... with all necessary measures."

Tonelson, the founder of the public policy blog RealityChek, called that statement as vague as it is pointed.

"We've seen so far no indication of any really serious Chinese intent to retaliate in any significant way," he said on "Closing Bell."

"I have to assume Beijing understands very well how heavily dependent it is for adequate growth and for adequate job creation on retaining some access to the U.S. market, which means it really doesn't want to start a trade war with its very best customer," he added.

A Chinese flag flies on a vessel moving past shipping containers being unloaded at a Tianjin Port Group Co. dock in Tianjin, China.
Nelson Ching | Bloomberg | Getty Images
A Chinese flag flies on a vessel moving past shipping containers being unloaded at a Tianjin Port Group Co. dock in Tianjin, China.

Concerns over a potential trade war helped push stocks lower on Thursday. The Dow Jones industrial average dropped 724.42 points to close at 23,957.89. The 2.9 percent decline was the worst since Feb. 8.

Trump called the tariffs the "first of many" trade actions. The new measures are designed to penalize China for trade practices that the Trump administration says involve stealing American companies' intellectual property.

Commerce Secretary Wilbur Ross told CNBC on Thursday he doesn't think there will be a trade war with China resulting from the latest tariffs.

"There will be some ultimate retaliation [from the Chinese] but I don't think it's going to be the end of the earth," he said on "Power Lunch."

Matt Gold, former deputy assistant U.S. Trade Representative for North America under President Barack Obama, said China may adopt a wait-and-see attitude.

Because Trump's memo gives the U.S. trade representative an option to pursue the World Trade Organization's procedures, China will step back and see if the U.S. follows the proper rules, he explained.

That would "definitely quiet down the rhetoric," Gold told "Closing Bell."

— CNBC's Fred Imbert and Kevin Breuninger contributed to this report.