Hong Kong/London
UJ
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Billionaire investor Ray Dalio warns that President Donald Trump’s trade tariffs may have brought the U.S. economy to the brink of recession — or potentially even something far worse.
“At this moment, we’re at a critical decision-making juncture and perilously close to a recession,” stated Dalio, founder of Bridgewater Associates, the globe’s largest hedge fund, during an interview on NBC’s “Meet the Press” on Sunday. “I’m also concerned about the potential of a much worse situation if this is not managed properly.”
Dalio, who accurately predicted the financial crisis of 2008, is among an increasing number, including significant Wall Street firms, who are apprehensive that tariffs could hinder the United States, the largest economy in the world.
“When you consider tariffs, debt, and the rise of new powers challenging the status quo, these elements generate significant disruptions. The way in which these changes are managed could lead to far more severe outcomes than a recession,” he commented.
Dalio emphasized that whether tariffs are enacted in a “stable” or “chaotic and disruptive” manner makes “all the difference.”
Thus far, the manner in which Trump has executed his tariff strategy — intended to bring manufacturing back to the U.S. and enhance jobs and tax revenues — has been deemed “very disruptive,” according to Dalio, who likened the tariffs to “throwing rocks into the production system.”
Trump’s global tariff initiatives have sparked significant market fluctuations in recent weeks, igniting concerns regarding a potential economic downturn. Recently, Trump announced a 90-day suspension of all “reciprocal” tariffs, with the exception of those levied against China, which have risen to at least 145%.
However, some electronic products from China, including smartphones and computer monitors, will be excluded from the new 145% tariff, according to a U.S. Customs and Border Protection notice released late Friday. Those products will still face a 20% duty imposed on China.
A recession is defined as a persistent decline in economic activity, typically measured by two or more consecutive quarters of negative growth.
Economists at Goldman Sachs foresee a 45% likelihood of a recession occurring in the U.S. within the next 12 months. Prior to Trump’s announcement of the 90-day suspension, they had indicated that a recession was the “base case” scenario, meaning it was highly probable.
According to Bloomberg’s Billionaires Index, Dalio has a net worth of $16 billion.
