"An all-out trade war with China would be damaging to Disney's business and to business in general. It's something I think we have to be very careful about," Iger said on CNBC's "Fast Money" on Tuesday.
Iger, a member of President Donald Trump's business council, said that doesn't mean, however, that the U.S. shouldn't consider ways to improve that relationship. Trump's advisory group convened last week, but Iger did not attend because of a previously scheduled Disney board meeting.
The longtime Disney CEO said he saw his position on Trump's council as an opportunity to represent the media and entertainment industry on issues like intellectual property, trade and tax reform.
China is an important market for many of Disney's segments, Iger said. Iger said that he can't say enough about the success of the company's park in Shanghai.
During a call with investors, Iger said Shanghai Disneyland was "one of our biggest success stories in 2016," welcoming more than 7 million guests since opening its gates in June last year. He said the park was at maximum capacity for almost all of the recent Lunar New Year holiday period.
"It's a national destination in China already," Iger said on CNBC.
Iger also cautioned against isolationism, in the wake of Trump's executive order restricting travel for people from seven Muslim-majority countries.
"Where we are as a nation is due to having an openness to the people of the world. It's incredibly important. I firmly believe that we cannot shut our borders to immigrants," Iger said. "I think a fair and just immigration policy is good for our country and good for our society."
Earlier Tuesday, Disney reported earnings that topped analyst estimates, but revenues fell short of expectations.
Iger said during a conference call with investors that he would be open to extending his term as CEO if that was what was best for the company. There is currently no succession plan for Iger, who has less than two years left until his planned retirement.