Iconic investor Ray Dalio is warning that US President Donald Trump’s tariff policies may cause a global economic slowdown.

In a new interview on CNBC, the Bridgewater Associates founder says he has serious concerns that increasing tariffs may wreak macroeconomic havoc at a time when the nation faces several other challenges.

“I agree with the problem. I am very concerned about the solution, the practicality of the solution. In other words, I think that this is going to create not only the problem, the capital markets problem that I’m talking about related to prices going up, costs going up, revenue going down and capital problem, but I also think that this is going to create great sand in the gears of production worldwide.

At the same time, I do agree that this interdependency, this issue of productivity in the world in which we have to be competitive and productive, and we’re not competitive in producing things is a longer-term problem, not an easy one. And I do expect that it is going to have political consequences. This is the nature of the cycle.”

Dalio also says the nation needs to address other systemic challenges, such as lowering the debt and reducing government spending.

“It is coming also at the same time as we have a budget issue. Now, the budget issue is a comparably important issue. So as we look ahead in the months ahead, we have to get the budget deficit down to 3% of gross domestic product. I worry about that at the same time as this is happening. These are not easy problems to solve. I’m concerned because the bigger problems exist, the debt exists. You can’t get around the debt. The overspending exists. You still have that. You still have that competitiveness issue. These have repeated throughout history. We’re in a period that’s very much like the 1930s.”

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