"That's what happened in the Great Depression," he told " Power Lunch ."

"I'd wonder if this isn't just a first step, that Trump has in mind raising other tariffs. Even if he doesn't there will be other countries who will retaliate and they'll get bigger. This is really like a first shot in a war and that's what is worrisome," said Shiller, who won a Nobel Prize for Economics in 2013.

Trump announced the tariffs Thursday , sparking fears of a trade war and rising consumer prices. As early as next week, the U.S. will impose a 25 percent tariff for steel and a 10 percent tariff for aluminum, the president said.

President Donald Trump 's tariffs proposal will have an "immediate disruption effect" and will hurt most people, except perhaps steel workers and those who own stocks in steel companies, economist Robert Shiller told CNBC on Friday.

Trump's proposal was widely condemned across the globe. Canada's Prime Minister, Justin Trudeau, said any U.S. tariffs on steel and aluminum imports would be "absolutely unacceptable" and European Commission President Jean-Claude Juncker said it "can only aggravate matters."

Critics have also warned that tariffs will result in higher prices for consumers. On Thursday, Toyota said they would "substantially raise costs and therefore prices of cars and trucks sold in America."

However, Commerce Secretary Wilbur Ross told CNBC on Friday that price increases from President Donald Trump's tariffs are "no big deal." He said they will have a "broad" but "trivial" impact.

Shiller, an economics professor at Yale University, said that tariffs have been trending down for decades thanks to the general growth and prosperity around the globe.

"Low tariffs help the whole world organize itself better and helps relieve inequity," he said. "The unfortunate thing, though, is that it does harm some American workers. We have to consider that."

He also doesn't dismiss critics who say China has been manipulating the steel market, creating an unlevel playing field. While he believes there are such manipulations, he said people like Peter Navarro, a China hawk who serves as White House National Trade Council Director, are overstating the issue.

"It's good for the whole world if China prospers. We want to see everyone growing. That helps bring peace and tranquility and more good for us," he said.

The White House did not immediately respond to a request for comment on Shiller's remarks.

— Reuters contributed to this report.