Trump’s tariffs have drawn harsh criticism from financier Ray Dalio, who claims they may push the US economy into recession. Dalio emphasized in a recent interview with NBC that the ongoing trade war is causing a great deal of uncertainty by upsetting corporate operations and financial markets.
Tariffs are Like Throwing Rocks into the Production System
Dalio, the founder of Bridgewater Associates, likened the effect of Trump’s tariffs to “throwing rocks into the production system.” He underlined that these tariffs have resulted in inefficiencies that affect the global economy even if they were meant to address trade imbalances.
Dalio notably noted that the problem is now more ambiguous as a result of Trump’s decision of a 90-day moratorium on reciprocal tariffs. Dalio believes that these actions might have significant long-term consequences, but businesses and investors are still waiting for clarity on the next steps.
A Looming Recession
Dalio is not alone in his concerns. Other financial heavyweights, such as JPMorgan’s CEO Jamie Dimon and BlackRock’s CEO Larry Fink, have also expressed fears of a potential recession. Both Dimon and Fink have indicated that the U.S. economy may already be in a recession or headed there soon, with Dimon calling it a “likely outcome.”
Dalio, who has long been a student of global economic cycles, believes that the current economic instability is part of a larger monetary, political, and geopolitical breakdown.He contends that although this collapse only happens once in a lifetime, it has a significant impact on the global economic order when it does.
The Way Forward
The upcoming months will play a major role in determining the direction of the U.S. economy. Due to the ongoing trade war and the fact that Trump’s tariffs are still in place, Dalio and other market experts are keeping a careful eye on developments. It’s unclear if the trade war would push the US into a recession or if it will be able to avoid one.
Dalio’s warnings serve as a sobering reminder of the risks associated with drawn-out trade conflicts and the potential long-term consequences of economic policies that obstruct global production and trade networks.
Source: Business Insider
