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Bridgewater Associates founder Ray Dalio isn’t thrilled about President Donald Trump’s escalating trade war. Looking at historical patterns, the billionaire investor has made a chilling parallel.
Speaking at a CNBC (CMCSA-2.35%) conference in Singapore on Wednesday, Dalio invoked 1930s Germany to highlight his concerns with the current trade war, including growing conflicts among nations.
He compared the trade war to Germany’s situation in the 1930s, citing debt write-downs, tariff hikes to drive revenue, and efforts to strengthen domestic industry, Bloomberg reported.
“Be nationalistic, be protectionist, be militaristic. That’s the way these things operate,” he said.
Dalio warned that these tensions could escalate into conflicts between countries, though he clarified that he wasn’t necessarily referring to military confrontation. He also noted that there could be significant opportunities for nations that remain neutral.
“Think about the US, Canada, Mexico, China,” Dalio said. “There will be fighting and that will have consequences, and I think that’s the main thing to pay attention to.”
He emphasized that he is remaining politically neutral and is just making an observation like a mechanic or doctor would.
In contrast, Trump has defended tariffs as a key driver of U.S. economic dominance.
“Tariffs are having a tremendously positive impact,” Trump said at a business roundtable on Tuesday, March 11, adding that they could go even “higher.”
Trump pointed to companies building plants in states like Michigan, Indiana, and South Carolina instead of Mexico. He stressed that the ultimate goal isn’t just generating revenue but also creating U.S. jobs, arguing that tariffs help prevent job losses.
Still, uncertainty surrounding Trump’s shifting trade policies has rattled markets, contributing to an extended sell-off and fueling fears of a recession.
Since taking office in January, Trump has imposed — and at times delayed —tariffs on Canada, China, and Mexico. Most recently, he announced a 25% tariff on global steel and aluminum imports. In response, Canada, China, and the European Union have retaliated with their own tariffs on select U.S. goods.