Trump's 10% Tariffs Spark Market Panic, Dalio Warns of Financial System Collapse

In early April 2025, U.S. President Donald Trump announced reciprocal import tariffs on goods from various countries, starting at 10 percent. This move sent shockwaves through the markets, triggering investor panic and eventually forcing the administration to delay the tariffs. Billionaire Ray Dalio, founder of Bridgewater Associates, warned that these developments could spell serious trouble for the entire financial system.

Dalio expressed concern that the trade duties introduced by the Trump administration are accelerating the processes of de-globalization and creating unsustainable trade imbalances. He believes this could lead to the collapse of the existing monetary system. Dalio noted that current trade tensions are disrupting the monetary, political, and international order, as well as fostering alternative trade networks to circumvent the U.S. dollar.

He emphasized that America's role as the largest consumer of manufactured goods and a major debt issuer is becoming increasingly unsustainable. Dalio called for more coordinated action on the part of the U.S. to address trade imbalances and increase self-sufficiency. He also highlighted the need to directly address the public debt problem to achieve better results compared to the current situation, which is characterized by constant struggle and instability.

The billionaire also noted that more and more countries are looking to reduce their dependence on the U.S. by forming new trade alliances and exploring alternative currencies. Dalio has previously expressed support for "hard" assets, such as Bitcoin and gold, in times of global uncertainty. He believes that Bitcoin, in particular, is increasingly behaving as an instrument of value preservation, making further growth in its popularity among capital holders more than likely.

Dalio ended by emphasizing that in order to prevent catastrophic consequences, we need to focus on fundamental changes in the world order rather than short-term market fluctuations. He urged investors and policymakers to pay attention to these profound changes and act accordingly.

While Ray Dalio hints at the coming rise in popularity of Bitcoin and gold, dollar-linked stablecoins are gaining weight in the coin industry. Mastercard has announced plans to integrate such tokens into its own global payment network. In partnership with Circle and Paxos, the company will begin testing tokenized deposit and USDC-like stablecoin payments in real-world commercial transactions.

Consumers will be able to earn rewards, pay, and spend the stablecoins in their crypto wallets via traditional cards at the over 150 million merchant locations accepting Mastercard globally, as well as withdraw stablecoins into their bank accounts with Mastercard Move. Mastercard Chief Product Officer Jorn Lambert spoke about the benefits of digital assets, stating that the benefits for mainstream use cases are clear and that the company believes in the potential of stablecoins to streamline payments and commerce across the value chain.

If the integration of stablecoins into Mastercard is successful, it could set a new standard for the entire market. For users, this means faster and cheaper international transfers, and for banks, it means an opportunity to remain competitive. Against the backdrop of Ray Dalio's alarming forecasts and the increasing instability of the global economy, Bitcoin and stablecoins are increasingly strengthening their positions as alternative financial instruments. While the traditional system is looking for a way out of the crisis, the crypto market is gradually becoming a real support for investors of the future.