Ray Dalio says it's more important for people to focus on the underlying factors behind Trump's new tariffs than the tariffs themselves. Ray Dalio says it's more important for people to focus on the underlying factors behind Trump's new tariffs than the tariffs themselves. Dia Dipasupil/Getty Images This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Ray Dalio has a new message for people: Don't assume the tariffs are just about tariffs. For several years, the Bridgewater Associates founder has been vocal about his assessment that the rules governing the world economy and geopolitics are systematically disintegrating. Dalio's 2021 book, "Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail," addressed this subject. In a social media post on Tuesday, Dalio wrote that people should also focus on the underlying factors that led to President Donald Trump's election and his new import taxes. "The far bigger, far more important thing to keep in mind is that we are seeing a classic breakdown of the major monetary, political, and geopolitical orders," he wrote. "This sort of breakdown occurs only about once in a lifetime, but they have happened many times in history when similar unsustainable conditions were in place." The billionaire highlighted three major forces at play: America's unsustainable debt relationships, widening wealth and education gaps undermining democracy in the US, and Washington's "America First" approach. Dalio on debt Dalio believes the US's debt is unsustainable and spurred the need for radical change VCG/VCG via Getty Images The first point is that US markets are built on debt by buying and borrowing from countries like China that can manufacture cheaper goods. But many industries have gone too far and become "hooked on debt," Dalio wrote, a phenomenon that he previously warned would eventually induce a "heart attack" in the US economy. The US debt-to-GDP ratio was 121% in the last quarter of 2024, compared to 64% in 2008. "Clearly, the monetary order will have to change in big disruptive ways to reduce all these imbalances and excesses, and we are in the early part of the process of it changing," Dalio wrote in his post. The hedge funder added that declining trust between the US and manufacturing countries like China had increased the pressure for radical change in the system. "Anyone who has studied history knows that such risks under such circumstances have repeatedly led to the same sorts of problems we're seeing now," Dalio wrote. Dalio on democracy at home Dalio wrote that growing inequality threatens to undermine democracies. John Senter/UCG/Universal Images Group via Getty Images Dalio also warned that democracies — including the US — are breaking down because of "huge gaps" in education, opportunity, productivity, and wealth. "These conditions are manifest in win-at-all-cost fights between populists of the right and populists of the left over which side will have the power and control to run things," he wrote. The billionaire also warned that these conditions have historically led to the rise of strong autocratic leaders and the decline of the rule of law. Dalio on the global order Dalio said Trump's "America First" approach breaks down the geopolitical order that the US led for decades. Tasos Katopodis/Getty Images "The era of the dominant power (the US) that dictates the order that other countries follow is over," Dalio wrote. That's part of the billionaire's longtime description of the US as an "empire" that's held great influence over the rest of the world since the end of World War II. Dalio has often said that this relationship with the world is part of a big cycle that naturally has to end. Trump's "America First" approach is marking that transition, he wrote in his post. "The multilateral, cooperative world order the US led is being replaced by a unilateral, power-rules approach," he continued. Dalio also wrote that artificial intelligence and natural disasters such as floods and pandemics stand to be game-changing elements in the world's future. The billionaire urged people to study how countries have reacted at similar points in history, including by imposing tariffs and suspending debt payments to other countries. "Many of these things would've been unimaginable not long ago, so we should also study how these policies work," he wrote. A representative for Dalio did not respond to a request for comment from Business Insider sent outside regular business hours.