Ray Dalio, founder of world's largest hedge fund, calls for US-China trade deal

Ray Dalio, the founder of the world’s largest hedge fund, has called for a U.S.-China agreement on tariffs and urged the Trump administration to focus next on reducing the U.S. deficit to 3% of GDP.

"Trump's decision to step back from a worse way and negotiate how to deal with these imbalances is a much better way," Dalio, who helms hedge fund Bridgewater Associates, said in a post on X, while referring to Trump's tariff decision earlier in the day.

Dalio believes now is a critical moment for all parties to rethink their strategies around debt and economic imbalances. He praised President Trump’s decision to shift from a more confrontational path toward negotiation, calling it “a much better way.” Dalio expressed hope that Trump would strike a deal with China that includes appreciating the RMB against the dollar—by China selling dollar assets and easing fiscal and monetary policies to boost domestic demand. Such a move, he said, would be a “win-win.” He also urged China to address its local government debt overhang through restructuring and monetization. Dalio stressed that major shifts in the global debt and monetary systems are inevitable. As a next step, he recommended that the Trump administration reduce the U.S. deficit to 3% of GDP.




Dalio also encouraged investors rattled by recent market volatility to reassess how they structure their portfolios to avoid extreme risk.

Earlier on Wednesday, in a dramatic shift, President Trump announced a temporary rollback of the steep tariffs he had recently imposed on dozens of countries, while simultaneously increasing pressure on China.