Expert warns about Trump's tariffs: US faces something "worse than a recession"

Frankfurter Rundschau Expert warns about Trump's tariffs: US faces something "worse than a recession" Victoria Krumbeck • 1 hour • 2 minutes read "Face a decision point" Donald Trump's tariffs are causing chaos around the world. An expert is now warning of the serious consequences of the tariff policy for the US. Washington, D.C. – US President Donald Trump's tariffs are still having an impact. Even though Trump suspended the tariffs for 90 days shortly after they went into effect, one country remains severely affected. China is subject to import tariffs of 145 percent. Economic and trade experts are concerned about the future of the US. Billionaire US entrepreneur Ray Dalio warns of the serious consequences of Trump's policies. Trump's Tariffs: Expert Warns of Consequences for the US – "Worse than a Recession" Dalio worries about "something worse than a recession" if Trump mishandles the tariffs and other economic policy measures, he explained on NBC News' "Meet the Press" on Sunday. Dalio, founder of the hedge fund Bridgewater Associates, responded to the question of whether the US would enter a recession: "I think we're at a decision point right now and very close to a recession." He warned that the monetary order could collapse. He observes a profound change in the domestic order as well as the global order, similar to the 1930s. "I've studied history, and this keeps happening," the billionaire said. He described the combination of tariffs, excessive debt, and an "emerging power challenging the existing power" as a destructive change. He said China, in particular, could benefit from US behavior. Trump's Tariffs: Expert Warns of Worse Consequences Than a Recession As early as 2007, Dalio warned of a financial crisis, which then occurred in 2008. According to the expert, however, the current situation can be easily managed. To achieve this, Congress must reduce the US budget deficit to about three percent of gross domestic product. "If they don't do that, we will have a supply-demand problem with debt at the same time as the other problems, and the consequences of that will be worse than a normal recession," he said. Consequences of Trump's Tariff Policy: Economist Warns of "Major Crisis" With the back-and-forth of US tariff policy, Trump is causing global uncertainty. Ifo head and economist Clemens Fuest does not rule out a global economic crisis. "If everyone goes in the wrong direction, it could lead to a major crisis," he said in an interview with the Süddeutsche Zeitung (SZ). Fuest believes it's possible that the sudden decline in US Treasuries was the reason why Trump withdrew the newly imposed tariffs. Where the US president is headed now is unclear. The idea behind the strict tariff policy was to strengthen domestic production. Many experts consider this goal to have failed. On Friday, Trump exempted electronic goods such as smartphones and computers from import tariffs from China. Instead, Trump announced that he would provide an answer on Monday regarding possible future tariffs on semiconductors. The tariff ping-pong seems unlikely to end for the time being.