Ray Dalio says Trump should negotiate a ‘win-win’ trade deal with China

Bridgewater founder Ray Dalio said that U.S. President Donald Trump’s temporary pullback on reciprocal tariffs was a “step back from a worse way” of addressing trade imbalances, urging the White House leader to negotiate a “win-win” trade deal with China.

On Wednesday, Trump announced a 90-day pause on country-specific tariffs, with the exception of 104% duties on Chinese imports.

In a post on the X social media platform, Dalio said on Wednesday evening that now was “a great time for all involved to reconsider their approaches” to rebalancing U.S. trade relationships, while acknowledging that America was facing trade “problems.”

“There are better and worse ways of handling our problems with unsustainable debt and imbalances, and President Trump’s decision to step back from a worse way and negotiate how to deal with these imbalances is a much better way,” he said.

“I hope and expect that he will do the same with the Chinese, which I believe includes negotiating a deal that appreciates the RMB against the dollar, achieved by the Chinese selling dollar assets while also easing their fiscal and monetary policies to stimulate their demand. This would be a win-win.”

In a Tuesday interview with CNBC, Dalio said that, while he agreed with Trump that there was a problem with America’s trade relationships, he was concerned about the president using sweeping tariffs as a solution.

“One way or another, there will have to be major changes to the debt/monetary orders to deal with the debt, trade, and capital imbalances problem,” he said on Wednesday, arguing that the Trump administration’s next move should be cutting the U.S. deficit to 3% of the nation’s GDP.

Stocks on Wall Street surged on Wednesday after Trump delayed his reciprocal tariffs. His temporary reversal on the policy took place after a global sell off that rattled equity and bond markets across the globe.

Dalio, who founded Bridgewater Associates — one of the world’s biggest hedge funds — in 1975, also said in his social media post that Trump’s seesawing trade policy presented investors with an opportunity to rethink their appetite for risk.  

“This is a great time for investors who were shocked and terrified by what happened (and what might happen) to reconsider their approaches to structuring their portfolios so they don’t have such intolerable risks,” he said.

“I can guarantee that another worse case of the market moves that terrified them will come along eventually.”