The United States is teetering on the brink of a formal economic recession and could be headed towards a more severe financial crisis, according to billionaire investor Ray Dalio. Speaking on NBC’s Meet the Press, Dalio highlighted the disruptive effects of former President Donald Trump’s tariff policies, which he said are fuelling instability in global markets and undermining confidence among both American businesses and international partners.
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Dalio, founder of Bridgewater Associates and renowned for predicting the 2008 housing crash, warned that the ongoing volatility in economic and political systems resembles the precarious conditions of the 1930s. He stressed that unless the White House approaches the situation with strategic foresight—particularly in its attempt to overhaul the global trade system—outcomes could be “much worse than a recession.” The challenges include rising debt, shifting global power structures, and a crumbling monetary framework, he said.
With US federal debt now exceeding $36 trillion, Dalio called for urgent fiscal responsibility, proposing a “3 per cent pledge” for members of Congress to reduce the budget deficit. Without such action, the imbalance between the supply and demand for debt could exacerbate current conditions. His remarks come amid sharp declines in tech stocks and widespread confusion caused by inconsistent tariff announcements. These include last-minute exemptions for smartphones and solar products, only to be followed by threats of reimposition.
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The broader uncertainty surrounding US trade policy—especially with key partners such as the EU, Japan, and Canada—has created concern across industries. Some believe the tariffs are mere bargaining chips, while others expect them to become semi-permanent features of a protectionist agenda. Analysts like Felix Stellmaszek of Boston Consulting Group suggest the automotive sector is undergoing a transformative moment, with policy-driven shifts likely to reshape global production for years to come.
