Billionaire Ray Dalio says President Donald Trump’s tariff war has helped push America close to a recession — or perhaps even “something worse.”
Dalio, who correctly predicted the 2008 financial crisis, is part of a growing chorus worried that tariffs could hamstring the US economy, the world’s largest.
Dalio said whether tariffs are implemented in a “stable” way or a “chaotic and disruptive way” makes “all the difference in the world.” So far, the way Trump has pursued his tariff plan — designed to reshore manufacturing to the US and boost jobs and tax revenue — has been “very disruptive,” the billionaire said, adding the tariffs are “like throwing rocks into the production system.”
Trump’s tariff offensive on the world has triggered global market turmoil in recent weeks, raising fears of an economic downturn. Last week, Trump declared a 90-day pause on all “reciprocal” tariffs, except those imposed on China, which increased to at least 145%.
A recession refers to a sustained decline in economic activity, often measured by two or more consecutive quarters of negative growth.
Goldman Sachs economists expect a 45% chance of a recession in the US over the next 12 months. Before Trump announced the 90-day pause, they had forecast a recession as the “base case,” meaning it was highly likely to occur.