Economist Mohamed El-Erian gave President Donald Trump’s tariffs a 60 percent chance of resulting in “fairer trade” for the U.S., El-Erian told CNBC’s “Squawk Box” Monday.

“It’s 60 percent that we end up with still free but fairer trade,” El-Erian said on CNBC. “There’s a 25 percent chance that this slips into a global trade war, one in four. But there’s a 15 percent chance of what I call the ‘Reagan moment’ for trade that would be amazing. That would transform the landscape of trade.”

El-Erian is chief economic adviser for Germany-based Allianz, the world’s largest insurance company. He is the former CEO of giant investment management firm PIMCO and former CEO of Harvard Management Company, which oversees the institution’s multi-billion dollar endowment.

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El-Erian attributes his predictions to game theory.

“We are better off for two reasons,” he said. “Not only because we’re big, but because we’re less reliant on trade in relative terms, so we get hurt less. That’s the key issue when you look at game theory. When you decide to play a cooperative game uncooperatively, the first question you have to look at is who loses most, because they will cry uncle first.”

El-Erian also discussed the multitude of problems that drove Trump to consider tariffs.

“This was a judgment call,” he said. “Either pursue existing multilateral institutions, or play a completely new game. … There are key issues. … There’s been a lot of intellectual property theft, lots of non-tariff barriers. China hasn’t evolved as much as it promised to evolve, and I think this is going to accelerate that process.”

People have been asking the wrong questions about trade tensions, El-Erian said.

“From day one, the question wasn’t whether the U.S. could win a trade war — of course it could,” he said. “It is how much damage would we incur in the process of winning this. I’ve said from day one that it’s just a matter of time until other countries realize that their best approach is to collaborate with the U.S. and fix things that are broken.” (RELATED: Elizabeth Warren Nabbed Nearly Half A Million Dollars In Gross Income From Her Writings In 2017)

El-Erian headed the Global Development Council under former President Barack Obama from 2012 to 2017. El-Erian also wrote The New York Times bestselling book “The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse.”

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