US President Donald Trump’s ‘reciprocal tariff’ on countries carry a danger far beyond a recession – even that of 2008 – noted Ray Dalio, the founder of Bridgewater Associates.

Notably, Bridgewater Associates, a hedge fund, is known for its foresight during the 2008 financial crisis.

Appearing for an interview, Dalio noted that Trump’s tariffs, if implemented would not only change how money works at the global level, but also have profound changes in domestic and world order geopolitically.

Dalio was also worried about the US debt, which is at 121%, close to double of what it was in 2008 (64%).

The 73-year-old billionaire said that an internal conflict unheard in a democracy may be knocking, and even military conflict may be afoot.

He added that the ‘value of money’ as we know it, may be lost.

The US dollar fell 0.7% on Monday – marking its fifth day of decline in a row. It pushed the DXY index, which measures the dollar’s strength against a group of major currencies, to its lowest level in three years. 

Since the start of April, when Trump declared ‘Liberation Day’ while unveiling his aggressive tariff policies, the dollar index has fallen more than 4%.

This decline comes as investors begin to lose confidence in the strength of the US economy and pull out their money from American assets.

President Trump addressed these concerns last week, saying that the US dollar would always remain ‘the currency of choice.’

He added that if any country tried to move away from using the dollar, a single phone call would be enough to bring them back.

Despite his confidence, market reactions have shown increasing nervousness.

Although experts believe that there is still no clear alternative to the dollar as a global reserve currency, the recent back-and-forth over tariffs has created uncertainty.

Just last week, the US increased tariffs on Chinese goods to a total of 145%. In response, China raised its tariffs on American imports from 84% to 125%.

“This trade battle has triggered a global selloff in markets,” experts noted. Even traditionally safe investments like US Treasuries have been hit.

The yield on 10-year US Treasury bonds is now heading for its biggest weekly jump since 2001, a sign that investors are demanding higher returns for the risk they perceive.

Meanwhile, the rupee recorded its biggest single-day gain in over two years on Friday last week, rising 0.75% as a weakening dollar and falling crude oil prices boosted sentiment.

The Indian currency closed at 86.05 against the dollar, a sharp improvement from Thursday’s close of 86.70.

This recovery came as investors grew increasingly concerned about the US economy which led to a broader decline in the dollar’s strength.

Trump on April 10 announced that he has paused the implementation of most of his tariffs because some people were getting “yippy” and “a little bit afraid”. 

“You have to be flexible,” he added when pressed.

US markets have been in turmoil since the reciprocal rates went into effect, and calls have emerged from some key Wall Street influencers, such as Bill Ackman, for a 90-day pause.

Trump has also faced some pushback to the tariff from a key advisor, Elon Musk, who has criticised them and engaged in a public spat with Peter Navarro, a key trade advisor to the US President.

(With inputs from syndicated feed)