Investing.com-- Billionaire investor Ray Dalio warned on Monday that a mix of U.S. trade disruptions and poor fundamentals were bringing about a major shift in the global political and monetary order.
Dalio said in a post on X that it was “already too late” for disruptions from U.S. President Donald Trump’s tariffs to settle down, stating that several exporters to the U.S. were now reconsidering their position in the face of steep trade duties.
He warned problems in the global economy ran deeper than just Trump’s tariffs, and that “radically reduced interdependencies with the U.S. is a reality that has to be planned for.”
Dalio warned that the U.S.’ role as the world’s biggest consumer of manufactured goods and as the biggest issuer of debt was unsustainable, and that the notion of selling to the U.S. and receiving dollars was “naive thinking.”
“We are on the brink of the monetary order, the domestic political and the international world orders breaking down due to unsustainable, bad fundamentals that can be easily seen and measured,” Dalio wrote.
Dalio, who founded hedge fund Bridgewater Associates, warned that there was a growing risk that the U.S. will be increasingly bypassed by “a world of countries” that will adapt to separations from the country and grow around it, especially as it embarks on a path of trade disruption.
“I fear that we are moving beyond the ideal time to be knowledgeable about and properly plan for these big changes in the world order,” Dalio said, calling on investors and policymakers to stop undulating in the day-to-day market moves and instead focus on a bigger, fundamental picture.
Dalio’s comments reflect heightened uncertainty over the U.S. economy under Trump, as the 47th president embarks on an agenda of steep trade tariffs and sweeping economic reforms.
Trump kicked off a bitter trade war with China, and also imposed steep tariffs on a slew of other major industries since taking office in January.
Investors and policymakers have largely balked at Trump’s tariffs, given that the president has flip-flopped on the measures several times. But the tariffs- especially a 145% duty on China- are expected to cause global economic disruption, and are also expected to dent U.S. growth.
A recent sell-off in the dollar and U.S. Treasuries reflected increasing investor anxiety over Trump’s policies.