Former Federal Reserve Chairman Alan Greenspan sharply disputed the notion the U.S. was being ripped off by other countries because of its trade deficit.

The former central bank chief told CNBC that President Donald Trump has the situation "reversed" as it pertains to global trade issues.

Asked if he thought the country was in a trade war, Greenspan told CNBC's Sara Eisen that "we're on the edge. I think we should be very sad if we do, because the presumption is that foreigners are ripping us off. It's nonsense."

However, the man nicknamed "The Maestro" for the way he handled central banking policy said he does not think the tit-for-tat tariffs between the U.S. and its trading partners will put much of a dent in an economy that appears to be running at a 3 percent or more growth rate.

In fact, he expressed support for some of what Trump is doing regarding fiscal policy.

"The fact is, I happen to approve some of the policies which this current administration is doing," Greenspan said. "The extraordinary cut in the marginal corporate tax rate was a very important thing. I never thought I would see it in my lifetime, but they pulled it off. It's working, and it's having an effect."

The administration ushered through the biggest tax cut in U.S. history last year, with Congress adopting a cut in the corporate levy from 35 percent to 21 percent. Critics say the personal tax cuts skewed heavily towards the rich, but the current projected rate of growth dwarfs what the economy experienced during most of the post-financial crisis recovery.

However, in recent days Trump has put a big emphasis on cutting the nation's trade deficit. In addition to taking on China and its years of intellectual property theft, the White House has gone after American allies like Canada and the European Union.

Greenspan said the overall impact on the U.S. economy is likely to be "not terribly much" though he said other nations could suffer.

More broadly, he added that he doesn't think the U.S. can stay around the 3 percent growth range for long due to demographics and low productivity levels.

"What I don't think is going to be happening over time is GDP that stays close to the 3 percent, and the essential reason is that ... entitlements are crowding out gross domestic savings," he said.