White House trade adviser Peter Navarro told CNBC that Monday's market plunge is not in response to fears of a trade war with China, instead suggesting that investors might have overreacted to the country's retaliatory tariffs on U.S. imports.

The backdrop: The Dow dropped more than 400 points today, led south in part by concerns of a potential trade war but also as a result of embattled tech companies and another anti-Amazon tweet from the president. Navarro criticized China's reciprocal tariffs, but said he doesn't expect the president to engage in an "action-response, action-response" tit for tat with the country.