Trump said an announcement on China trade will be coming after the bell on Monday. He's expected to announce a new round of trade measures in an escalating tit for tat between the two countries.
"The president wants to have a big, public battle and is not under the impression that if we got in a shooting trade war that it would lead both of us into recession. But the market knows that it would," said Goolsbee, who served as chairman of the Council of Economic Advisors under Obama.
That's why people are hoping others in the administration can do what they can to thwart Trump, he said Monday on "Power Lunch," referring to the recent New York Times op-ed from a senior administration official who detailed those attempts.
Earlier in the day, top White House economic advisor Larry Kudlow said that Trump has "not been satisfied" with the trade talks with China. He also confirmed the administration was readying additional tariffs.
"The president has suggested tariffs on a couple $100 billion" in Chinese goods, said Kudlow, director of the National Economic Council. "My guess is that an announcement will be coming soon."
His comments came after a report by The Wall Street Journal that Trump was set to move forward with tariffs on $200 billion in Chinese goods. The report followed other news outlets saying that U.S. officials were trying to restart U.S.-China trade talks.
"Every time they take one step toward 'let's have some trade negotiations, let's try to achieve something, let's try to get some allies on board with us to collectively go confront China,' they then turn around and the Mr. Jekyll comes out and the president begins tweeting," Goolsbee said. "There is a big danger to the markets and a big danger to the economy."
On Monday morning, Trump tweeted that tariffs put the U.S. in a strong bargaining position.
In July, Trump told CNBC that he's ready to put tariffs on all $505 billion of Chinese goods imported to the U.S.
— CNBC's Fred Imbert contributed to this report.