(The Economic Times) - Ray Dalio, the billionaire founder of Bridgewater Associates, said Tuesday that in the wake of US President Donald Trump’s tariff policies, the world is "on the brink" of the breakdown of the monetary order, domestic political order, and international world order. Ray Dalio believes it is “too late” to combat the economic fallout of Trump’s tariffs and says the world economic order, with the US at the center, is breaking down.
In a social media post on X, formerly known as Twitter, he stated that while some believe the tariff disruptions will settle with more negotiation, he is now hearing from more people dealing with these issues that "it is already too late." Dalio is known for predicting the 2008 financial crisis, and has been a long-time doom predictor.
What Ray Dalio said on Trump's tariffs?
Ray Dalio said more people, including exporters to the US, nowrealize that whatever happens with tariffs, “these problems won't go away, and that radically reduced interdependencies with the US is a reality that has to be planned for.”
Dalio emphasized that the US can no longer sustain its role as the top consumer and debt issuer, and expecting to be repaid in strong, stable dollars is “naive.” Therefore, he said other countries need to make alternative economic plans.
“There is a growing risk that the United States, imposing these challenges to deal with, will increasingly be bypassed by a world of countries that will adapt to these separations from the United States and create new synapses that grow around it,” he said.
In his post, Dalio said he had heard from a growing number of people, including exporters who trade with the United States, who recognize that “whatever happens with tariffs … radically reduced interdependencies with the U.S. is a reality that has to be planned for.”
“It is also increasingly being realized that the United States’ role as the world’s biggest consumer of manufactured goods and greatest producer of debt assets to finance its over-consumption is unsustainable.”
Who is Ray Dalio?
Ray Dalio, the founder of Bridgewater Associates—the world’s largest hedge fund by assets—rose to prominence on Wall Street after accurately predicting the 2008 financial crisis. He has since gained a reputation as a frequent forecaster of economic downturns. However, in an interview with The Wall Street Journal last year, Dalio admitted he was mistaken in his 2023 prediction that the US economy was heading into a debt crisis.
The post comes at a time when investors, business leaders, and governments around the world are seeking clarity on the rationale behind President Donald Trump’s tariff policies. Amid mounting uncertainty over the future stability of the US economy, foreign investors have begun pulling back from dollar-denominated assets and US Treasuries. Although the shift is unlikely to be immediate, both market participants and academics are increasingly entertaining the idea that the US dollar may eventually lose its status as the world’s dominant reserve currency.
Ray Dalio, who issued this warning while promoting his latest book, cautioned that investors would be "naive" to assume they can continue lending to the US and expect to be repaid in "hard" dollars—currency that holds its value.
“There is a growing risk that the United States... will increasingly be bypassed by a world of countries that adapt to these separations and create new synapses that grow around it,” he wrote.
Dalio is not alone in raising concerns about the economic risks of Trump’s policies. Other prominent figures—such as JPMorgan Chase CEO Jamie Dimon, Duquesne Family Office founder Stanley Druckenmiller, and hedge fund manager Bill Ackman—have also voiced fears that the trade war initiated by the former president could damage the US economy.
Trump's trade policies have reshaped global trade dynamics in the first 100 days of his second term, with aggressive tariffs on major partners, causing rising tensions and uncertainty.
Even the president’s senior advisers reportedly cautioned him weeks before his tariff decision that the measures could damage global markets and risk a downturn in the US economy.
The Economic Times
April 30, 2025
