Ray Dalio, founder of the world's largest hedge fund, called for a U.S. deal with the Chinese on tariffs and said that the next goal for U.S. President Donald Trump's administration should be to cut the country's deficit to 3% of GDP.

"Trump's decision to step back from a worse way and negotiate how to deal with these imbalances is a much better way," Dalio, who helms hedge fund Bridgewater Associates, said in a post on X, while referring to Trump's tariff decision earlier in the day.

In a stunning reversal, Trump earlier on Wednesday said he would temporarily lower the hefty duties he had just imposed on dozens of countries while further ramping up pressure on China.