Bridgewater's Dalio Says Trade War Is `Political Show' for Now

(Bloomberg) -- Ray Dalio, who runs the world's largest hedge fund at Bridgewater Associates, said the impact of tariffs proposed by President Donald Trump “will be very small” on trade between the U.S. and China.

“I believe that what is happening now is more for political show than for real threatening,” Dalio said in a post on his LinkedIn page Monday. “If tariffs are imposed as indicated, I would hope and expect the Chinese response to be small and symbolic so that both sides will have rattled their sabers without actually inflicting much harm.”

Dalio said that there's plenty of room for “win-wins” in negotiating between the two nations, and that he doesn't expect an escalation any time soon. He said that it's in the best interest of the Trump administration to “make clear what it wants most and, if they can't do that, to not be aggressive until they figure out what beneficial exchanges are.”

The S&P 500 Index dropped for the fourth time in five days after a flurry of tweets from Trump signaled he has no intention of backing down from his plans. Last week, he said the U.S. would slap levies on steel and aluminum imports to protect national security, drawing threats of retaliation from Asian and European countries. China sharply criticized the U.S. move on tariffs, saying it would hurt the global economy.

Read the full post here.

To contact the reporter on this story: Katia Porzecanski in New York at kporzecansk1@bloomberg.net.

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Alan Mirabella, Heather Perlberg

©2018 Bloomberg L.P.