Ray Dalio, founder of Bridgewater Associates, is sounding the alarm over the Trump administration’s global tariff policies, warning they could reshape the world economy to America’s disadvantage. Beyond reducing economic efficiency, Dalio said the tariffs are accelerating international dealmaking that increasingly bypasses the U.S.
“That’s not to say that reasonable tariffs, in certain ways, couldn’t achieve some beneficial outcome,” the hedge fund billionaire said during a Paley Media Council event in New York City on May 22. “But by and large, it’s changing the world order in a way which is making it more inefficient and actually causing growth around the United States.”
Dalio, who has long warned about the ripple effects of protectionist trade policy, noted a rising trend in cross-border agreements that exclude the U.S. “You’re seeing more countries adapting and finding out how they can do business with each other, and sort of almost isolating the United States,” he said.
The billionaire investor founded Bridgewater Associates nearly 50 years ago and built it into one of the largest hedge funds globally, managing $92.1 billion in assets as of last year. He stepped down as CEO in 2017 but remains a prominent voice in finance, with an estimated net worth of $14 billion.
A national debt crisis
Dalio’s concerns extend beyond trade policy to America’s fiscal health, particularly the ballooning federal deficit. “We will have a deficit of about 6.5 percent of GDP—that is more than the market can bear,” he said, pointing to rising long-term bond yields as a red flag. “I think we should be afraid of the bond market,” he added, likening it to a patient in a “critical situation.”
The national debt is set to rise further following the passage of President Donald Trump’s sweeping tax-cut bill, dubbed the ‘One Big Beautiful Bill Act,’ which cleared the House on May 22. According to Dalio, meaningful deficit reduction won’t be addressed until after the 2026 midterm elections, when a bipartisan committee is expected to take up the issue. He cited recent conversations with lawmakers on both sides of the aisle.
Although Dalio said there is broad consensus that reducing the deficit is essential, he remains skeptical that political gridlock can be overcome. “It’s like being on a boat that’s headed for rocks,” he said. “They agree that they should turn, but they can’t agree on how to turn.”