Ray Dalio says Trump’s ever-changing tariff policy could contribute to a problem ‘worse than recession’ 

• Ray Dalio warns that President Trump's tariff policies, combined with rising debt and global tensions, could lead to a breakdown of the U.S. “monetary order,” causing disruptions far more severe than a typical recession. He compares current conditions to the 1930s, citing risks of internal political conflict, international power shifts, and economic instability that could escalate into a global crisis if poorly managed.

President Trump’s shifting tariff policy is part of a broader set of economic and geopolitical pressures that could trigger a crisis “worse than a recession,” according to Bridgewater Associates founder Ray Dalio.

Dalio, whose net worth is estimated at $16 billion, said in an interview with NBC’s Meet the Press that the foundation of the American economy—the “monetary order”—is under threat. He warned that the breakdown of this system could have far deeper consequences for consumers and businesses than a standard economic contraction.

Dalio said history is shaped by five major forces: monetary cycles like credit and debt; internal political conflict; shifting global power dynamics; technological change; and natural disasters such as pandemics. In his view, all five are currently in play.

He sees the Trump administration’s tariff agenda—marked by sudden announcements, reversals, and exceptions—as symptomatic of policymakers struggling to manage these broader shifts.

Initial tariffs targeting China were followed by delayed actions against Mexico and Canada, aimed at curbing fentanyl and slowing immigration.

Additional duties on industries such as autos and steel were unveiled as part of a campaign dubbed “Liberation Day,” with blanket 10% tariffs introduced on April 2.

Higher rates were imposed on select trading partners like the EU, Japan and India, though they were granted a 90-day delay. China, which imposed retaliatory tariffs, was excluded from the pause.

On April 5, the White House moved to exempt smartphones and computers imported from China, following concerns over the ballooning U.S. trade deficit.

A history lesson with stark warnings for the future

Dalio criticized the chaotic rollout.

He said: “What was put there [in the April 2 tariff announcement] was like throwing rocks into the production system and those impacts would be enormous in terms of the efficiency of the whole world.

“Right now, we are 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.

“A recession is two negative quarters of GDO and whether it goes there? We always have those things. We have something that's much more profound, we have a breaking down of the monetary order—we are going to change the monetary order because we cannot send the amounts of money.”

The 75-year-old economic expert may be referring to the government debt issue, which he has highlighted before.

Many—including JPMorgan Chase CEO Jamie Dimon and Fed chairman Jerome Powell—fear that America may continue to amass public debt to the point it cannot repay it, prompting a situation where foreign nations hike their rates for Uncle Sam or simply refuse to buy its debt.

But Dalio added tariffs and changes to the domestic and world order compound the government debt issue.

“Such times are very much like the 1930s,” he continued. “I've studied history, and history repeats over and over again. If you take tariffs, if you take debt, if you take the rising power challenging the existing power … Those changes in the orders—the systems are very, very disruptive. How that's handled could produce something that's much wore than a recession or it can be handled well.”

Worst case scenario

Dalio’s worst-case scenario includes a collapse in the value of money, internal political conflict “not like the democracy we know,” and global tensions that could escalate into military conflict.

“These breakdowns have occurred before,” he said. “The existing monetary and geopolitical order began in 1945. These systems go in cycles, and I worry about the breakdown—particularly because it doesn’t have to happen.”

This story was originally featured on Fortune.com

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