Mogul Ray Dalio said that the definitions are not just a matter of tax revenue – it is also a way for countries to prepare their economies for times of conflict and war.
The Trump administration also announced the mutual definitions in China, the European Union, and dozens of other regions on Wednesday, Dalio wrote in the LinkedIn publication that import taxes are “necessary in times of international conflict over the great power.”
The reason for the billionaire? It tends to decrease dependence on foreign supply chains.
Dalio, who founded the hedge fund in Bridge Frex, wrote that the customs tariff “can reduce the current account imbalances and the capital account.”
The billionaire added: “In the simple English language, it means reducing the dependency on foreign production and foreign capital, which is particularly estimated at times of global geopolitical conflicts or wars.”
He has written that this makes local companies less efficient because global supply chains are strangled but more survival as long as local consumers can still buy enough goods.
Dalio’s publication was not specifically an autopsy of the Trump administration tariff, so it does not necessarily say that the White House presented these taxes to expect war.
Instead, he wrote about customs tariffs in general, while highlighting its typical effects and potential motives for governments to introduce such measures.
For example, the billionaire wrote that the customs tariff tends to bring inflation to the countries that provide and stagnate to the world.
But Dalio’s Point over the possible “International Great Power Start” is in line with the usual billionaire warnings that the world is heading towards a period of great conflict and the threat of high war.
The billionaire published a book on this belief in 2021, where he expected the United States and China competition to bring basic and chaotic changes on how to operate the world.
Related stories
Business Insider tells the innovative stories you want to know
Business Insider tells the innovative stories you want to know
Either way, the US debt must be addressed, Dalio says
On Wednesday, about the definitions, Dalio recalled another of his usual points about the state of the world: he believes that the US government debt crisis must be resolved. Federal debt to GDP is around 120 %.
He wrote: “Production, trade and capital disorders (most importantly of that debt) must be descended in one way or another, because they are dangerously not sustainable for critical, economic and geopolitical reasons.”
Dalio warned in February that the debts would cause a “heart attack” for the American financial system if it is left to accumulate.
“You are in great danger of this heart attack, mainly, and now what will you do about it?” He said.
At the time, he said that while the government efficiency management in Elon Musk will seek to reduce the government’s budget, these efforts alone will not be sufficient to reform the debt crisis.
Bridgewateer Associats and Princies, the Dalio Book Brand, did not respond to the Dalio comments requests that were sent outside the regular working hours by Business Insider.
