The GOP tax overhaul law, which includes a cut in the rate that U.S. corporations pay, will make American businesses more competitive globally, said BlackRock Chairman and CEO Larry Fink.

"One of the big problems that's going to face Mexico is the U.S. corporate tax rate is lower than Mexico," Fink told CNBC's "Squawk Box" on Friday.

The Republican tax law cuts the federal U.S. corporate rate to 21 percent from 35 percent. The corporate tax rate in Mexico is 30 percent.

Companies that had domiciled in Mexico for tax reasons are going to make their new tax homes in the U.S., Fink said. "That's a tax arbitrage," taking advantage of the difference in rates.

"It's going to make the U.S. more competitive for companies to come back to the United States; for companies to put factories here," he said.

That's exactly what President Donald Trump wants. He's made bringing businesses back to the U.S. a top priority of his administration.

On Thursday, Fiat Chrysler became the latest company to increase its commitment to the U.S., with the automaker saying it will invest $1 billion to relocate a plant from Mexico to Michigan.

Fiat Chrysler, citing the tax overhaul, will also pay 60,000 of its U.S. employees, excluding senior leadership, bonuses of $2,000 each.

The competitive tax advantage over Mexico comes at a time when the U.S. is renegotiating NAFTA.

Trump has said he would pull out of the 1994 North American Free Trade Agreement with Mexico and Canada if the U.S. can't get better terms.

Fink said the Republican tax law, which includes an overhaul of the personal code, is largely going to help Americans, and should add about 1 percent annually to economic growth, at least in the first few years.

In Friday's wide-ranging CNBC interview, Fink also said most people saving for retirement, even those as old as 50, should have the bulk of their portfolios in stocks rather than bonds. BlackRock is still "quiet bullish" on equities at these levels, he added.

He appeared on the show shortly after BlackRock, the largest asset manager in the world, reported better-than-expected quarterly earnings and revenue. Total assets under management stand at nearly $6.3 trillion, slightly ahead of estimates.