The move sparked a nearly 300-point decline in the Dow Jones industrial average on Tuesday due to trade war fears.
But billionaire Paul Tudor Jones, the hedge fund manager who called the October 1987 crash, downplayed the possibility of a trade war last week.
"I would call it more of a trade irritant than a real trade problem," Jones told CNBC in a "Squawk Box" interview with Andrew Ross Sorkin on June 12. "You have to put things in perspective, right? If we just look at our four biggest trading partners they have a simple weighted average tariff of about 6 percent, we have one of 3½ percent. So there is a 2½ percent gap in unfairness."
The investor said if Trump is trying to "normalize the tariffs" to match our trading partners, the market impact will be limited. Instead Jones actually predicted the stock market could go "crazy" to the upside into the end of the year. He noted that he is closely watching the situation in case his assessment is incorrect and the trade conflict becomes something much worse.
In similar fashion, CNBC's Jim Cramer said Tuesday that he's not worried yet about the escalating trade conflict between the U.S. and China.
"Right now, this is not serious," he said on "Squawk on the Street." "I'm waiting for something serious to hit my way."
Goldman Sachs CEO Lloyd Blankfein agreed the blustery trade rhetoric will not lead to financial disaster.
"I don't think we're in a suicide pact on this. So I suspect that we're not going to cause the economies to collapse," he said Tuesday at the Economic Club of New York. "This is part of a negotiating pattern."
Perhaps the most successful investor in history also said the two countries will find an acceptable compromise.
Last month, Warren Buffett said he was optimistic the U.S. and China will avoid a serious trade conflict because countries eventually do what it is in their best economic interests.
"I don't think either country will dig themselves into something that precipitates and continues any kind of real trade war," he said at the Berkshire Hathaway 2018 annual shareholders meeting on May 5. "There will be some back and forth, but in the end I don't think we'll come out with a terrible answer on it … [Trade] benefits are huge and the world's dependent on it in a major way for its progress that two intelligent countries [won't] do something extremely foolish."