The planned summit between leaders of the U.S. and North Korea may be off for now, but the Trump administration could still walk away with lessons about "diplomatic craft trade," said a former American diplomat.

"I do hope the Trump administration has learned a little about diplomatic trade craft and the need to send lower level delegations to test the assumptions of whether North Korea's prepared to do the things we hope they were doing," Christopher Hill, formerly U.S. ambassador to South Korea under President George W. Bush, told CNBC's "Squawk Box" on Friday.

The summit that was supposed to be held on June 12 in Singapore would have been the first face-to-face encounter between a sitting U.S. president and a North Korean leader. But Trump called it off on Thursday.

The cancellation probably came after "reality began to set in" that both countries had "excessive expectations" going into the meeting, said Hill.

North Korea had wanted sanction reliefs without giving up its nuclear capabilities, while the U.S. had hoped for the rogue nation to denuclearize and not pay anything for it, explained Hill, who is now chief advisor to the chancellor for global engagement and professor of the practice in diplomacy at the University of Denver.

Such a gap in expectations on both sides could have been avoided if the U.S. had gotten a better reading of North Korea's intentions, especially since Secretary of State Mike Pompeo had met with North Korean leader Kim Jong Un twice in the past few months, according to Hill.

"I'm not quite clear what happened with Mike Pompeo on his two trips, but it's pretty clear he did not get a basis for a summit that is a complete denuclearization deal and what I don't understand is the inability to have kind of put out in writing what it is they wanted from the summit, what is it we wanted from the summit," he said.

"So, I think this was kind of a first major issue for the Trump administration and I hope they can take some lessons from it," he added.