The latest round of US and Chinese tariffs took effect this week. Washington seems to be using stock market movements to justify its trade policy. Earlier we spoke to Nick Lardy, a senior fellow at the Peterson Institute for International Economics, who said it is a big mistake to do so.

WANG GUAN CGTN ANCHOR Q1: "President Trump seems to be a big advocate of using the stock market performance as a justification to launch this trade war. How do you look at that assessment?"

NICHOLAS LARDY, SENIOR FELLOW PETERSON INSTITUTE FOR INT'L ECONOMICS "I think using changes in stock markets as a justification for policies is a serious mistake. The stock market has declined periodically in China. I think stock prices in China are primarily driven not by underlined economic activity, but by perceptions on the part of retailers and investors of what's happening to liquidity. We may be seeing the same thing in 2018."

WANG GUAN CGTN ANCHOR Q2: "Some Washington strategists believe that the Chinese economy is slowing down, and therefore the U.S. is more likely to win in this 'game of chicken'."

NICHOLAS LARDY, SENIOR FELLOW PETERSON INSTITUTE FOR INT'L ECONOMICS "I think that's a fundamental misunderstanding of the dynamics of the Chinese economy. The indicators that are sometimes pointing to weakening retail sales, but overall consumption demand remains quite strong in China. And retail sales data do not include expenditures on education, health, travel, recreation and so forth. These are increasingly important items for China's huge and still rapidly growing middle class. Similarly, if we look at trade data, we see China's imports. But I don't think we're seeing much reliable evidence yet that the Chinese economy is slowing, and I think it's a big strategic mistake on the part of the U.S. to assume that China is going to capitulate because its economy is very weak."