Bridgewater Associates analyzes the underlying reasons behind the tariff policy: the breakdown of the old order.

Founder of Bridgewater Associates, Ray Dalio, warned that investors are too narrowly focused on tariffs and not paying enough attention to the potential "once in a lifetime" unraveling of major currencies, politics, and geopolitical orders. The monetary/economic order is breaking down because of excessive existing debt, the rapid pace of new debt accumulation, and the dependence of existing capital markets and economies on unsustainable levels of debt. The debt is unsustainable because of significant imbalances. Dalio wrote that the imbalance is due to debtors (such as the U.S.) owing too much debt and continuing to take on too much debt because they rely on debt to finance excessive consumption, and creditors (such as China) holding too much debt and relying on selling goods to debtors (such as the U.S.) to sustain their economy. Dalio stated that behind the tariffs, we are witnessing a typical unraveling of major currencies, politics, and geopolitical orders, and it is crucial to focus on five deep-seated issues as they are the true drivers of the overall major cycle change. The five factors mentioned by Dalio include: unraveling of the monetary/economic order, unraveling of the U.S. domestic political and economic order, unraveling of the international geopolitical order, escalating destructive forces of nature, and the transformative impact of technologies like artificial intelligence. At a time when global markets are in turmoil, President Trump's tariff policies could potentially disrupt the global economy. Dalio, a billionaire founder, wrote in a social media post that investors may overlook the impending biggest disruptors if they do not pay attention to these potential conditions. Dalio added, "These imbalances are putting a lot of pressure and must be corrected in some way, which will largely change the monetary order. In a de-globalized world, huge trade imbalances and huge capital imbalances are obviously incoherent, with major participants not able to trust other major participants will not cut off their needed supplies (as is the U.S.'s concern), or pay what is owed (as is China's concern)." Dalio stated that the disparities in education, opportunities, productivity levels, as well as income, wealth, and values are manifesting in the collapse of democratic systems and the rise of authoritarian leaders. He added that in the geopolitical arena, the multilateral cooperation world order led by the sole dominant power, the U.S., is being replaced by "America First" unilateral actions. This is evident in the U.S.-led trade wars, geopolitical battles, technology wars, and in some cases, military conflicts that we are now witnessing.