April 10, 2025 — In the wake of President Donald Trump’s recent decision to implement a 90-day pause on country-specific tariffs—excluding the hefty 104% levies on Chinese imports—billionaire investor and Bridgewater Associates founder Ray Dalio has weighed in, urging the administration to pivot from confrontation toward collaboration, particularly with China. The commentary comes at a pivotal moment for U.S. trade policy and investor confidence, resonating powerfully with global markets and financial thought leaders alike.
Posting to the X social media platform, Dalio described Trump’s move as a “step back from a worse way” of dealing with America’s persistent trade imbalances. The influential hedge fund manager emphasized that the pause presents a strategic window for reassessing economic approaches, saying, “There are better and worse ways of handling our problems with unsustainable debt and imbalances… this is a much better way.”
Dalio strongly encouraged Trump to take this opportunity to negotiate a “win-win” trade agreement with China. He proposed a sophisticated mechanism whereby the Chinese government could appreciate the renminbi (RMB) against the U.S. dollar by offloading dollar-denominated assets, while simultaneously employing stimulative fiscal and monetary policies to boost domestic demand. According to Dalio, this dual-pronged solution could realign global trade flows while benefiting both economies—a nuanced and diplomatic alternative to sweeping tariffs.
Markets reacted positively to Trump’s tariff pause, with Wall Street experiencing a notable rally. Global equity and bond markets, previously shaken by fears of an escalating trade war, found temporary relief. Dalio interpreted this market behavior as a clear signal for investors to reassess their exposure to geopolitical and macroeconomic risks. He warned, “This is a great time for investors who were shocked and terrified by what happened (and what might happen) to reconsider their approaches to structuring their portfolios so they don’t have such intolerable risks.”
He also cautioned that the volatility seen in recent weeks is unlikely to be a one-off event, highlighting that another major market disruption is “guaranteed” to come eventually. This aligns with his long-held concerns about structural weaknesses in the U.S. financial system.
Dalio’s latest remarks also underscore his ongoing alarm over the United States’ fiscal position. The U.S. federal budget deficit has now exceeded $1 trillion in 2025, a milestone he considers symptomatic of a deeper structural issue. During a recent CNBC interview, Dalio emphasized the “very severe supply-demand problem” regarding U.S. debt, arguing that the volume of debt the government needs to issue is far outpacing global demand.
He recommended that the Trump administration work to reduce the federal deficit to 3% of GDP, signaling that fiscal discipline will be essential to restoring global investor confidence and economic balance.
Dalio’s insights come at a critical juncture as the United States navigates complex trade dynamics, a ballooning federal deficit, and heightened investor anxiety. His message is clear: rather than escalate tensions through aggressive tariffs, President Trump should capitalize on this pause to pursue a strategic, balanced agreement with China—one that offers sustainable benefits for both nations.
For investors, Dalio’s commentary doubles as a wake-up call, reminding them that market volatility is not a fluke but a recurring feature of an increasingly fragile global economic system. The time to rethink risk is now.
