Ray Dalio Offers Advice to Trump on Navigating a Trade Deal with China

Ray Dalio, founder of Bridgewater Associates, has shared his thoughts on how President Donald Trump can achieve a successful trade deal with China, offering a strategic formula that he believes would benefit both nations.

Dalio, a long-time observer of China, has emphasized the importance of approaching trade imbalances and debt challenges with care, especially in light of escalating tariffs between the US and China.

Dalio’s comments follow President Trump’s recent decision to temporarily pause reciprocal tariffs with most countries for 90 days, excluding China. According to Dalio, this move signals a step back from potentially more harmful approaches, opening the door for negotiations aimed at addressing the deeper economic imbalances between the US and China.

Dalio proposes a solution that could lead to a “win-win” scenario, where China would allow its currency, the renminbi (RMB), to appreciate against the US dollar. This could be accomplished through a combination of China selling off dollar assets and easing its fiscal and monetary policies to boost domestic demand. Dalio believes this approach would help China address its internal debt challenges, particularly by restructuring and monetizing its local government debts.

While Dalio acknowledges the ongoing trade tensions, he highlights the importance of dialogue between the US and China. His suggestion aligns with Trump’s willingness to pause tariffs temporarily, despite his previous stance on aggressively increasing duties. As China has recently allowed its currency to depreciate and raised tariffs on US goods in response, Dalio’s advice comes at a critical time when both countries are under intense pressure to find common ground.

Dalio also reflects on the broader implications of the trade conflict, offering advice for investors who may have been rattled by recent market fluctuations. He encourages them to reassess their risk tolerance and consider strategies that will help shield their portfolios from future market disruptions. Dalio warns that further turbulence in global markets is inevitable and urges investors to be proactive in managing potential risks.

With input from Market Watch, CNBC, and FOX Business.