Investors are concerned about the possibility of a trade war. On Thursday, President Donald Trump signed an executive memo that will slap tariffs on up to $60 billion in Chinese imports. China responded on Friday by proposing a list of 128 U.S. products as potential retaliation targets.
While experts have called China's response muted, a former advisor to President George W. Bush, John Rutledge, expects to hear more from China. "They're going to come back hard," he told "Power Lunch" earlier Friday.
Cashin said numbers are "being thrown around wildly," noting that Trump's $60 billion figure is the size of the trade. He expects the tariffs to be more like $3 billion to $4 billion.
Another factor in the sell-off was the thin volume, or lack of people in the market, on Friday, he said.
"You get a disproportionate effect. A small amount of selling takes the index lower than normal because there's just nothing there to hold it back," Cashin said.
The veteran trader has been in the business for more than 50 years, beginning his career at Thomson McKinnon in 1959. In 1964, at age 23, he became a member of the NYSE and a partner in P.R. Herzig & Co.
— CNBC's Fred Imbert contributed to this report.