Billionaire Ray Dalio Warns Of Something Worse Than Recession If Trump Tariffs Aren’t Handled Well: ‘Very Much Like 1930s’

Billionaire and Bridgewater Associates founder Ray Dalio said President Donald Trump’s tariffs are a symptom of a much bigger problem. 

The U.S. has chosen to go on a warpath with trading partners by imposing varied tariff rates, with China being the worst hit. Although the White House has relented by announcing a 90-day pause for most nations, except China, uncertainty surrounding the measure remains an overhang on the market.

Speaking with NBC News on the “Meet The Press” program, Dalio said whether Trump’s tariffs aggravate the complicated mix of challenges the world faces depends on how well they are handled. 

Delving into the logic behind the tariff moves, the billionaire said the reality is there is a desire to bring in tax revenue and build manufacturing jobs in the U.S.

“How that’s done, whether that’s done in a practical way, whether that’s done in a stable way, whether that’s done with quality negotiations….or whether it’s done in a chaotic and disruptive way that produces great conflict makes all the difference in the world, “ he added.

Dalio said the way the tariffs are being carried has been “very disruptive” so far. “We don’t know what the numbers are….It depends, at the end of the 90 days,” he said.

“What was put in there is like throwing rocks into the production system and those impacts would be enormous in terms of the efficiency of the whole world.”

Dalio did not rule out a recession if the tariff measures are not handled well. The billionaire said the U.S. was now at a decision making point and very close to a recession. 

“I’m worried about something worse than a recession if this isn’t handled well,” he added.

Dalio said there could be a breakdown of the monetary order, which is far worse than a recession, which is technically two-quarters of negative GDP growth.

“We are having profound changes in the world order,” he said, adding that “such times are very much like the 1930s.”

In the 1930s, the world was hit by the “Great Depression” - a severe worldwide economic downturn that lasted from 1929 to 1939, marked by drastic declines in GDP, acute deflation and severe unemployment. 

The billionaire said things such as tariffs, debt and rising power challenging the existing power change the orders and prove to be very disruptive.

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