Bridgewater Associates founder and co-chairman Ray Dalio is speculating that President Trump is taking an idea from Franklin D. Roosevelt’s playbook in dealing with an adversary across the Pacific, but cautioned that such a strategy would have acute repercussions.

In a blog posting on LinkedIn, Dalio noted Trump’s raising the notion of blocking U.S. investments in China and recalled how Roosevelt used special emergency powers to freeze Japanese assets and place an embargo on oil sales to Japan in the years prior to the U.S. entry into World War II.

“Regarding the capital and currency wars, the ability of the U.S. president to unilaterally cut off capital flows to China and also freeze payments on the debts owed to China and also use sanctions to inhibit non-American financial transactions with China must be considered as possibilities,” Dalio wrote. “That’s why the proposed step of limiting American portfolio investments in China makes me both think about the implications of this step and wonder if it is an inching toward bigger moves.”

The Westport-based hedge fund executive added that if Trump were to go forward with such a move, it could have lethal consequences on the U.S. economy.

“Just the realization that these moves can be used has important implications for capital flows,” he wrote. “For example, how would you feel if you were an adversarial foreign investor holding U.S. bonds given this situation, given where U.S. bond interest rates are and the impending deficits and monetizations of them? Of course, China dumping U.S. bonds would have its own terrible consequences too. In any case, from not having to worry about such things in the past, now all market participants need to worry about them.”

Dalio warned that if the U.S.-China trade feud were to metastasize further, the global community would not be siding with the U.S. for economic alliances.

“Countries are increasingly having to choose whether they are aligned with the U.S. or China,” he stated. “When presented with this choice, they typically answer it based on both economic and military calculations. Almost without exception, they say that the economics favors being aligned with China because China is more important to them economically (because China is bigger in trade and bigger in capital inflows) and that the military support favors the U.S. if the U.S. is willing to use it to support them, which is highly doubtful. At the same time, China’s own military capabilities (including cyber) are rising relative to the U.S.’s, especially in Asia. As a result, China is for the most part quietly winning the geopolitical war, particular in Asia.”