While China's quick response to Friday's tariff decision threatened to escalate the battle, many private economists said they expected both sides would find a way to avoid a full-blown trade war that would harm producers in both countries.
"The big message from China to the United States is think twice, think three times before repeating this kind of relief for a U.S. industry because if you do this again, we are going to hit you again," says Gary Hufbauer, a trade expert at the Peterson Institute, a Washington think tank.
What the President did is use a legitimate tool, explains Carlos Gutierrez, former Commerce Secretary and CNBC Contributor. So far the Chinese are reacting in the way they should react, so I wouldn’t go so far as to call this a trade war.
Both Gutierrez and economists seem to agree that both nations have too much at stake economically to allow the dispute to get out of control.
Is there any trade here?
Shares of power company AES Corp rose after a Wall Street Journal report suggested China's sovereign wealth fund was in talks to take a stake in the firm. I'd keep an eye on this stock, says Guy Adami.
*You can see our entire interview with Carlos Gutierrez at the end of the Word on the Street video.
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