[Text by Observer Network, Xiong Chaoyi] Ray Dalio, founder of the world's largest hedge fund Bridgewater Associates, is known for applying historical lessons to investment decisions. He predicted the 2008 global financial crisis based on past crises and made substantial profits while other hedge funds were struggling.

As Trump's tariff chaos was wreaking havoc worldwide, on April 7 local time, Dalio published a long article on the social media platform X, reminding investors not to narrowly focus only on tariffs. Trump recently announced large-scale "reciprocal tariffs," which are just one aspect of the collapse of the main monetary, political, and geopolitical order, a phenomenon that occurs "once in a lifetime" (a century once).

Dalio analyzed that the deeper cause of Trump's tariff policy lies in uncontrolled debt levels and excessive borrowing growth. The U.S. is caught in a vicious cycle of "borrowing to maintain excessive spending." He also believes that the current international geopolitical order is collapsing because the era when a single major power, the U.S., dictated the compliance of other countries has ended. Multilateral cooperation in the world order is being threatened by unilateralism, and this transformation is embodied in America's trade war, technology war, and even localized military conflicts it leads.

Founder of Bridgewater Associates, Ray Dalio, CNN

In his article, Dalio stated that although Trump's tariff policies have received widespread attention "deservedly," few people pay attention to the underlying causes leading to the tariffs and the larger-scale turmoil that may follow.

"This kind of collapse happens 'once in a lifetime,' but similar unsustainable conditions have occurred many times in history," he reminded investors. If these fundamental structural contradictions are ignored, they may overlook the greater shocks ahead.

Specifically, Dalio listed five aspects of "shocking situations":

1. The monetary and economic order is collapsing because there is too much existing debt and the speed of increasing debt is too fast.

2. Domestic political order is collapsing due to the huge gap between people in education level, opportunity level, productivity level, income and wealth level, as well as values.

3. International geopolitical order is collapsing because the era where a major power (the U.S.) dictates compliance from other countries has ended.

4. Natural disasters (droughts, floods, and pandemics) are causing increasingly destructive impacts.

5. Technological changes such as artificial intelligence (AI) will have a tremendous impact on all aspects of life.

When discussing the collapse of the monetary and economic order, Dalio analyzed that the deeper cause of Trump's tariff policy lies in the loss of control over debt levels and excessive borrowing growth. He believes that the U.S. is caught in a vicious cycle of "borrowing to maintain excessive spending." "These imbalances are seeking release in various forms, and the correction process will fundamentally reconstruct the monetary order."

Dalio further added that in the geopolitical field, the multilateral cooperative world order led by the sole dominant major power, the U.S., is being replaced by so-called "America First" unilateralism. Currently, people are witnessing this shift manifest in America's trade war, geopolitical games, technology war, and even localized military conflicts it leads.

He finally reminded that the interrelation among these five factors is "crucial," and Trump's current tariff policies may affect all of them.

Previously, in his book *Principles for Dealing with Changing World Orders*, Dalio described six stages of the "great cycles" in history (or the "six-stage theory of internal national cycles"). He pointed out that the U.S. is in the "fifth stage," on the edge of great chaos, or the eve of civil war. He mentioned that the most likely type of "civil war" to occur in the future in the U.S. is not people shooting each other with guns, but state and local governments refusing to comply with federal government instructions, and the chaotic and dysfunctional way the federal government handles such situations.

Last year, in an interview with Nikkei Asia on geopolitical issues, Dalio expressed concerns about Sino-U.S. relations. He believed that the "economic war" between these two countries undoubtedly brings geopolitical risks. Previously, he had warned that Sino-U.S. relations are already at the "red line" in some areas.

Regarding Sino-U.S. relations, Dalio emphasized at that time that many Americans and Chinese are already "intertwined," and separating them would be terrible for almost everyone. This "mutual connection" benefits both the Chinese and American people, and the mutual understanding and influence generated will promote global peace and progress.

Since President Trump returned to office, he has repeatedly imposed tariffs on China, deliberately provoking a tariff war and trade war. On April 8, the U.S. government announced that the rate of "reciprocal tariffs" on Chinese goods would increase from 34% to 84%. The U.S. approach of escalating tariffs against China is wrong, seriously infringing on China's legitimate rights and interests, and severely damaging the multilateral trading system based on rules.

According to the Ministry of Finance website on April 9, the Tariff Commission of the State Council issued a notice today stating that starting at 12:01 PM on April 10, the additional tariff rates specified in the announcement (Announcement No. 4 of 2025) regarding the import of goods from the United States will be adjusted. The additional tariff rates on all imported goods from the United States will increase from 34% to 84%.

On the afternoon of April 9, Foreign Ministry spokesperson Lin Jian said that the legitimate development rights of the Chinese people cannot be deprived, and China's sovereignty, security, and development interests cannot be violated. We will continue to take firm and effective measures to safeguard our legitimate rights and interests.

This article is an exclusive contribution by Observer Network and is not authorized for转载(translated as "reprinting").

Original source: https://www.toutiao.com/article/7491322541342802482/

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