President Donald Trump needs to reach an agreement with China to end the trade war if he wants to be reelected next year, private equity billionaire David Rubenstein told CNBC on Friday.

"Some agreement is better than no agreement," said the co-founder of The Carlyle Group, a global investment firm based in Washington, with $223 billion of assets under management.

"If the China trade agreement is not resolved in some form before the election, I suspect it will not be good for those running for reelection," Rubenstein said on "Squawk Box."

Talking with reporters Thursday evening, Trump said that U.S. and Chinese officials have been holding "productive" talks. The president said he expects negotiators for both sides to meet as planned next month in Washington, despite 10% U.S. tariffs on $300 billion in additional Chinese imports set to take effect on Sept. 1.

Trump also said he hopes to talk "soon" by phone with Chinese President Xi Jinping. Beijing on Thursday initially said it would take tariff countermeasures, but later said it hopes to "meet the U.S. halfway."

"We don't have to have the most comprehensive China trade agreement of all time in order to have an agreement with China," said Rubenstein, a political independent who says he doesn't give money to either party. "Right now there's uncertainty about China. Give the markets some certainty, even if it's not comprehensive. I think the markets would respond well to it, and I think the Chinese want to make a deal."

Neither country will make "the greatest deal, from their point of view," Rubenstein added. He urged Trump to act in the next few months.

As trade talks had stalled in June, Rubenstein predicted a resolution by the end of the year. In January, however, he indicated that his conversations with U.S. and Chinese officials suggested a trade deal in "the next few months."