Trump tariffs pushing America to 'something worse': Billionaire who predicted 2008 recession

American billionaire and the founder of the hedge fund Bridgewater Associates, Ray Dalio, criticised the sweeping tariffs imposed by US President Donald Trump and said that he is “worried about something worse than a recession” hitting the United States. The remarks from the prominent investor came during his interview with NBC News’ “Meet the Press.” What makes Dalio’s warning significant is the fact that he was the one who predicted that the American economy would be hit by a recession in 2008.

“I think that right now we are at a decision-making point and very close to a recession,” Dalio told NBC News in a recent interview. “And I’m worried about something worse than a recession if this isn’t handled well,” he added. The billionaire reiterated the stark warning in several of his posts on X, formerly known as Twitter.

In the social media post, Dalio noted that it is “too late” to combat the economic fallout of Trump’s tariffs and insisted that the world economic order with the US at the centre is “breaking down”. The billionaire repeated the same warning in the NBC News interview, which he had done before he made the post.

https://t.co/PUUxSqYIv8

— Ray Dalio (@RayDalio) April 28, 2025

History repeats itself: Dalio

During the interview, Dalio explained that the combination of tariffs, excessive debt and  “rising power challenging the existing power” as changes that are “very, very disruptive.” “We are having profound changes in our domestic order … and we’re having profound changes in the world order. Such times are very much like the 1930s,” Dalio said. “I’ve studied history, and this repeats over and over again.”

“How that’s handled could produce something that is much worse than a recession,” he added. However, the investor noted that there is still hope and the situation could “be managed very well.” He went on to urge the members of the US Congress to pledge to reduce the budget deficit by a few percentage points to 3 per cent of the GDP.

“If they don’t, we’re going to have a supply-demand problem for debt at the same time as we have these other problems, and the results of that will be worse than a normal recession,” he said. When asked about the worst-case scenario, Dalio said he was worried about “the value of money, internal conflict that is not the normal democracy as we know it, an international conflict in a way that is highly disruptive to the world economy and could even be a military conflict.”

Is it too late?

In a separate social media post, Dalio claimed that it is “too late” to combat the economic fallout. “Based on many of my indicators,” he wrote in a social media post, “it appears that we are on the brink of the monetary order, the domestic political and the international world orders breaking down due to unsustainable, bad fundamentals.”

In his post on Monday, Dalio said that he had heard from a growing number of people, including exporters who trade with the United States, recognise that “whatever happens with tariffs … radically reduced interdependencies with the US is a reality that has to be planned for.”

“It is also increasingly being realised that the United States’ role as the world’s biggest consumer of manufactured goods and greatest producer of debt assets to finance its over-consumption is unsustainable," he added. The remarks from Dalio came at a time when investors, business leaders and governments around the world are desperate for clarity on Trump’s tariff policy.

The man who predicted the 2008 recession

Dalio came to prominence on Wall Street after he accurately predicted the 2008 financial crisis. Back in 2007, his company, Bridgewater, warned that “embedded risks in the system are quite large” ahead of the eventual financial crisis. A few months later, the company noted that interest rates would rise “until there is a cracking of the financial system,” adding that “no one knows how this financial market contagion will play out.” Months later, the recession began.

Since then, Dalio has been seen as some sort of a perennial doom forecaster. While speaking to the Wall Street Journal last year, Dalio admitted that he “got it wrong” with his 2023 forecast that the US economy was entering a debt crisis.

In his lengthy post on X, the billionaire noted that while the duties were “very important developments,” people are “mostly overlooking the vastly more important forces that are driving just about everything, including the tariffs.”

“The far bigger, far more important thing to keep in mind is that we are seeing a classic breakdown of the major monetary, political, and geopolitical orders,” he wrote. “This sort of breakdown occurs only about once in a lifetime, but they have happened many times in history when similar unsustainable conditions were in place,” he added.

With inputs from agencies.