The market is betting that Vice President Mike Pence will continue the administration's pro-business policies should President Donald Trump's legal problems take a dark turn, closely followed trader Art Cashin told CNBC on Monday.

The Dow Jones Industrial Average, and Nasdaq ended last week in positive territory despite the legal issues of former Trump associates — the bombshell felony conviction of Paul Manafort and the guilty plea by Michael Cohen. Friday saw record closes for both the the S&P 500 and Nasdaq.

"Intriguingly, the president's legal woes don't seem to have any market effect yet," said Cashin, UBS director of floor operations at the New York Stock Exchange.

Cashin added in the "Squawk on the Street" interview that investors are calling it the "Pence put," meaning markets expect Pence will have no issues taking lead at the White House if Trump becomes "handicapped."

Late Tuesday, former Trump lawyer Cohen pleaded guilty to federal fraud charges in New York as ex-Trump campaign chairman Manafort was convicted of fraud by a federal jury in Virginia.

Trump is attacking what he sees as unfair trade on a number of fronts. His moves have been met with retaliatory measures from the European Union, Canada, Mexico and China.

A new round of U.S. tariffs on $16 billion worth of Chinese imports kicked in Thursday, prompting an equivalent retaliation from Beijing.

Cashin mentioned comments made by economist Mohamed El-Erian earlier on CNBC. The former CEO of Pimco said there's a 60 percent chance that Trump's hard line with China and Europe yields "fairer trade" for the U.S. He predicted a 15 percent chance that Trump's approach would result in a "Reagan moment" in trade.

Investors appear to be OK with the hard-line approach as long as any key trading partners don't "walk out the door," permanently, Cashin said. "They think the process is slow, but it's ongoing."

He has previously said Wall Street is catching on to Trump's "dramatic" approach to dealmaking. Cashin began his career at Thomson McKinnon in 1959. In 1964, at age 23, he became a member of the NYSE and a partner in P.R. Herzig & Co.