Ray Dalio, the American billionaire and founder of Bridgewater Associates, has strongly criticised the wide-ranging tariffs introduced by President Donald Trump. Speaking during an interview on NBC News’ Meet the Press, Dalio said he fears the United States could be heading toward something even more damaging than a recession.
Dalio’s concerns are being taken seriously because he accurately predicted the 2008 financial crash. In his interview, he said, “I think that right now we are at a decision-making point and very close to a recession. And I’m worried about something worse than a recession if this isn’t handled well.” He also echoed this warning on X (formerly Twitter), highlighting growing risks facing the US economy.
Dalio Believes It’s “Too Late” to Reverse the Damage
On social media, Dalio claimed that it might already be too late to fix the problems caused by Trump’s tariff policy. He wrote that the US-led global economic system is starting to “break down.”
In his NBC interview, Dalio had already expressed this concern, stating that the tariffs, combined with high levels of national debt and the emergence of new global powers, are causing deep disruptions. He said, “We are having profound changes in our domestic order … and we’re having profound changes in the world order. Such times are very much like the 1930s. I’ve studied history, and this repeats over and over again.”
Dalio explained that if these issues are not managed properly, they could result in consequences “much worse than a recession.” However, he added that there is still a chance to handle the situation. He urged lawmakers to bring the budget deficit down to 3% of GDP.
“If they don’t, we’re going to have a supply-demand problem for debt at the same time as we have these other problems, and the results of that will be worse than a normal recession,” he warned.
Potential Worst-Case Scenario
When asked about the most dangerous outcomes the country might face, Dalio did not hold back. He said he was worried about “the value of money, internal conflict that is not the normal democracy as we know it, an international conflict in a way that is highly disruptive to the world economy and could even be a military conflict.”
In another post, he stressed again that the US may already be past the point of preventing this fallout. “Based on many of my indicators,” he wrote, “it appears that we are on the brink of the monetary order, the domestic political and the international world orders breaking down due to unsustainable, bad fundamentals.”
Dalio also said he’s been hearing from more people in business, especially exporters who rely on the US market, that they now expect a future with “radically reduced interdependencies with the US.”
He added, “It is also increasingly being realised 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.”
Dalio’s Track Record: The 2008 Prediction
Dalio earned his reputation in financial circles after he correctly foresaw the 2008 economic crash. In 2007, his firm Bridgewater warned that “embedded risks in the system are quite large.” Later, they predicted that interest rates would keep rising “until there is a cracking of the financial system,” and said, “no one knows how this financial market contagion will play out.” Soon after, the US economy fell into recession.
Although Dalio has gained a reputation as someone who regularly predicts economic doom, he did admit in 2023 that he made a mistake in forecasting a debt crisis that year. In an interview with The Wall Street Journal, he said he “got it wrong.”
Bigger Issues Than Tariffs
In a long post on X, Dalio pointed out that while the tariffs are serious, they are not the only concern. He wrote, “The far bigger, far more important thing to keep in mind is that we are seeing a classic breakdown of the major monetary, political, and geopolitical orders.”
He explained that such breakdowns only occur “about once in a lifetime,” but history shows they have happened before when nations faced similar unstable conditions.
