April 10, 2025 — As tensions around U.S. trade policy continue to stir economic and political conversations, renowned investor and Bridgewater Associates founder Ray Dalio is urging a major course correction. In response to President Donald Trump’s recent decision to temporarily halt country-specific tariffs—with the glaring exception of a 104% tariff on Chinese imports—Dalio is calling for thoughtful diplomacy over aggressive economic confrontation. His remarks come at a moment when markets are volatile, investors are on edge, and global financial stability feels increasingly fragile.
Taking to the public on X (formerly Twitter), Dalio voiced his cautious optimism, referring to Trump’s 90-day tariff pause as a necessary retreat from a more harmful path. He believes this move creates an opportunity to rethink the way the U.S. addresses its ongoing trade imbalances and fiscal challenges. In his words, while America’s problems are very real—particularly when it comes to debt and global trade deficits—there are smarter, more strategic ways to tackle them. And now, more than ever, might be the right time to do just that.
Dalio didn’t stop at mere criticism or approval—he offered a detailed vision of what a more productive relationship with China could look like. Rather than continuing to levy extreme tariffs, Dalio suggests the U.S. and China could strike a mutually beneficial deal. He floated the idea of China allowing its currency, the renminbi (RMB), to strengthen against the U.S. dollar. This could be done, he explained, by the Chinese government selling off its U.S. dollar holdings, while also boosting domestic demand through proactive monetary and fiscal measures. Such a strategy, Dalio believes, could correct global trade imbalances and prevent unnecessary economic fallout on both sides—a true “win-win” outcome.
Markets appeared to breathe a sigh of relief following Trump’s announcement. Wall Street rebounded, and global investors responded positively after weeks of turbulence fueled by tariff anxieties. But Dalio sees this moment as more than just a temporary rally—he views it as a wake-up call. He urged investors to take this opportunity to reevaluate how much risk they’re carrying, and how well their portfolios are prepared for future uncertainty. According to Dalio, those who were caught off guard by recent market shocks should reassess their approach now, before a more severe downturn arrives—something he says is not just possible, but inevitable.
This perspective fits neatly into Dalio’s broader concerns about the U.S. economy, particularly the growing federal deficit. The national shortfall has now surged past the $1 trillion mark in 2025, which he views as a symptom of deeper systemic issues. Speaking recently to CNBC, Dalio warned that the U.S. is facing a fundamental mismatch between the amount of debt it needs to sell and the world’s willingness to buy it. This growing imbalance, he argues, could spark further financial instability if left unaddressed.
To stabilize the situation, Dalio advises the Trump administration to reduce the federal deficit to around 3% of GDP. Such fiscal discipline, he believes, would not only help mend America’s economic health but would also help reassure global investors that the U.S. remains a sound and stable market.
In essence, Dalio’s message carries both urgency and hope. He sees the current pause in tariffs not as a solution in itself, but as a chance to adopt a better strategy—one rooted in negotiation, cooperation, and economic realism. For President Trump, it’s an invitation to pursue a more balanced and sustainable path forward in dealing with China. And for investors, it’s a crucial reminder: uncertainty is here to stay, and preparation is more important than ever.
