DUBLIN - Billionaire investor Ray Dalio, founder of Bridgewater Associates, believes that the reciprocal tariffs announced by U.S. President Donald J. Trump on Wednesday are inevitable.

As quoted from CNBC18tv.com, he explained that tariffs have significant consequences and can prepare America for major conflicts and wars.

Such taxes are "necessary" during times of international power struggles. In other words, tariffs are not just about tax revenue but also a way for a country to prepare its economy for conflict.

Dalio wrote in a LinkedIn post that import taxes (tariffs) can reduce imbalances in current and capital accounts.

"Which in plain English means reducing the dependencies on foreign production and foreign capital is especially valued in times of global geopolitical conflict/war," Dalio added, as quoted by Business Insider.

According to Dalio, who is also a member of the Danantara Advisory Board, tariffs will make local companies less efficient because global supply chains are disrupted, but they can still survive as long as domestic consumers continue to buy their products.

However, Dalio added, there are several general effects of imposing tariffs. First, an increase in inflation in the country implementing the tariffs. Second, global economic stagnation.

The impact of Trump's tariffs, he continued, will depend on several factors such as monetary, fiscal and currency control policies. "There is a lot to measure in order to judge the market impact of big tariffs," he wrote on X. (LM)