- The big question is whether the Trump administration will give favored trade partners like Canada an exemption from the tariffs.
- After Thursday's Trump tariff announcement, stocks suffered a third straight session of sharp declines.
Dan DiMicco, former Trump campaign trade advisor, and Robert Holleyman, a deputy U.S. trade representative under Obama, actually agreed on Friday that China is the biggest trade cheater and must be stopped.
But how to actually achieve that goal is where things break down.
"The biggest culprit in the global steel overcapacity ... is China, China, China," DiMicco told CNBC's "Squawk Box" on Friday. "They are out to destroy ... this country for numerous years throughout our history."
DiMicco said the tariffs of 25 percent on steel and 10 percent on aluminum that Trump announced Thursday send a message to China and other nations, "We're open for business, but you better play fair."
"This is not something that should be a surprise to anybody," he added, pointing out that Trump campaigned on being tough on trade.
The narrative that the Trump tariffs won't really hurt China because it's such a small source of imported U.S. steel is false, said DiMicco, alleging as others have that China dumps its cheap steel through other countries.
Holleyman, the former Obama trade official, told CNBC in a separate interview, "We have to start by acknowledging the problem in all this is China. China has a massive excess production of steel and aluminum that is hurting not only the U.S. but global markets."
"But what we've done in firing this volley, firing this rocket of these new trade taxes is essentially ... turned our allies away from us. And caused them to be allies of China," said Holleyman. "The country that's going to be hit the hardest by this is Canada," which could complicate talks among the U.S., Canada and Mexico to renegotiate NAFTA.
The big question is whether the Trump administration will give favored trade partners like Canada an exemption from the tariffs.
"The way these things work is they'll carve out some exemptions," said Mark Grant, chief global strategist at B. Riley FBR, adding he does not believe the worst-case trade war scenario that slammed the stock market Thursday and early Friday will come to pass.
Stocks plunged strongly Thursday on trade war concerns because they're still in a fragile, "corrective phase," Grant, a 40-year veteran of finance, told CNBC on Friday.
But with the tariffs not being implemented until what's expected to be next week, Grant said, "I think they're going to back this down" either through exemptions or modifications.
After Thursday's Trump tariff announcement, stocks suffered a third straight session of sharp declines. However, ahead of Friday trading, the Dow Jones industrial average and were each still about 5 percent above the early February lows, which briefly marked a correction in excess of 10 percent from the Jan. 26 all-time closing highs.
The Dow and S&P 500 were about flat for the year, as of Thursday's close, after a roaring start to 2018 following incredible gains last year.
Adding to market fears, there are multiple media reports casting doubt on top Trump economic advisor Gary Cohn's future after he was unable to convince the president not to impose steel and aluminium tariffs.
There's been speculation for months about whether or not Cohn may leave his post as director of the National Economic Council. Cohn, who was the No. 2 executive at Goldman Sachs before joining the White House, is seen by Wall Street as a moderating voice in the administration.