The escalating trade conflict between the U.S. and many of its economic partners "can get out of control very quickly" and "really hamper global growth," said Raghuram Rajan, a finance professor at the Chicago Booth School of Business.
"The key question is whether these bargaining ploys, threats of leveling tariffs, et cetera result in real negotiation which create that win-win situation; or do entities, do players get locked into positions which mean they actually have to carry out their threats? In which case we're in a lose-lose situation," Rajan told CNBC's "Squawk Box" on Tuesday at the Nomura Investment Forum in Singapore.
"Some of these situations can get out of control very quickly," added Rajan, who's also the former central bank governor in India.
In a speech at the forum, Rajan warned that investors cannot take it for granted that "sensible negotiations" will happen between the U.S. and its trading partners.