Bridgewater Associates founder Ray Dalio issued a warning about the Trump administration’s global tariff policy, warning them that they could reshape the world economy into a disadvantage of the United States. In addition to reducing economic efficiency, tariffs are accelerating international transactions, increasingly bypassing the U.S.
“This is not to say that in some ways, reasonable tariffs cannot achieve some beneficial results,” hedge fund billionaire said at a May 22 Pelley Media Committee event in New York City.
Dalio, who has long warned of the ripple effect of protectionist trade policy, noted the upward trend of excluding US cross-border agreements: “You are seeing more countries adapting and finding out how they do business with each other and almost isolating the United States,” he said.
Billionaire investors founded Bridgewater Associates nearly 50 years ago and built it into one of the world's largest hedge funds, with assets under management as of last year. He resigned as CEO in 2017, but remains a major voice in finance, with an estimated net worth of $14 billion.
Treasury debt crisis
Dalio's focus is beyond U.S. fiscal health, especially as federal deficit surges. “Our deficit will account for 6.5% of GDP, which is more than the market can afford,” he said, noting that long-term bond yields rose as red flags. “I think we should be afraid of the bond market,” he added.
National debt will rise further after President Donald Trump passes “a large tax bill,” which is known as “a beautiful bill bill” that cleared the House of Representatives on May 22. According to Dalio, the Bipatis Commission is expected to resolve the issue until after the 2026 midterm elections. He cited recent conversations with lawmakers on both sides of the aisle.
Although Dalio said it was widely believed that reducing the deficit was crucial, he still doubted that the political impasse could be overcome. “It's like heading to a rock on a boat,” he said. “They agree that they should turn around, but they can't agree on how to turn.”
