Billionaire investor Ray Dalio warned on April 29, 2025, that it is “too late” to escape the economic fallout from Trump’s tariffs, saying the global economic order centred on the United States is breaking down under unsustainable fundamentals. Dalio, founder of Bridgewater Associates, wrote on X that indicators suggest a collapse in monetary, domestic political, and international systems, driven by the impact of these levies on the trade war.
Bridgewater Associates Founder Sounds Alarm
Ray Dalio gained fame by forecasting the 2008 financial crisis. In his recent post, Dalio acknowledged an error in his 2023 US debt crisis prediction but stated that current data on exports and capital flows indicate that Trump’s tariffs have significantly altered trade relationships. Exporters now plan for reduced interdependencies with the US, signalling a shift in the global economic order.
Key Findings on Trade War Impact
- Irreversible economic fallout: Dalio wrote, “We are on the brink of the monetary order…breaking down due to unsustainable, bad fundamentals,” directly citing the effects of Trump’s tariffs.
- US reserve currency at risk: He warned it would be “naive” to assume continued demand for dollar-denominated debt, as countries seek alternatives to a devalued dollar.
- Emerging new alliances: According to Dalio, nations are establishing “new synapses” that bypass the United States, reducing its role in global trade and finance.
Wider Concerns Among Investors
Dalio joins other finance leaders Jamie Dimon, Stanley Druckenmiller and Bill Ackman in sounding the alarm over Trump’s tariffs and their trade war impact. Foreign investors have retreated from US Treasuries and dollar-backed assets amid uncertainty about America’s economic strategy, heightening concerns over the US reserve currency status.
What’s Next for the Global Economic Order
While the dollar remains the primary global reserve currency, academics and market participants are exploring alternatives to it. A diminished US reserve currency could raise borrowing costs and alter capital flows, reshaping the international economic order and amplifying the financial fallout from the trade war.
