Trump’s tariff policy is not random. He is deliberately projecting unpredictability and recklessness in a calculated bid to gain negotiating leverage over foreign nations, weaken institutional resistance at home, and ultimately expand presidential power.
His aggressive tariffs and economic provocations are not isolated mistakes.
They are his preferred negotiating tools. Or what he himself calls “the art of the deal.”
Of course, this does not mean that he will be successful.
But knowing the fundamental reasons behind his strategies helps see things through a different lens, especially as global fear and uncertainty are at their peak.
Trump’s strategy: ‘The Madman Theory’
Economist Daniel Ellsberg first introduced this unusual concept during a lecture in the late 1950s. He argued that in some negotiations, rationality could be a disadvantage.
Nobel laureate economist Thomas Schelling later elaborated that appearing calm and rational isn’t always helpful in negotiations.
Sometimes, seeming unpredictable or irrational, or acting like a “madman”, could provide a strategic advantage.
President Nixon adopted this approach under the advice of Henry Kissinger. Nixon intended to convince Soviet leaders he was unpredictable enough to start a nuclear war if they didn’t pressure North Vietnam to surrender.
Ultimately, the reason why Nixon failed back then, is that he failed to convince the world that he was irrational.
The Soviets knew he wasn’t.
A century later, Donald Trump appears to be implementing the Madman Theory openly.
He explicitly calls himself a bit crazy. A quick glance through Trump’s biography as the commanding figure in the show “The Apprentice” will reveal the basis of this theory.
But maybe Trump has learned from Nixon’s mistakes. He makes sure his threats are loud, direct, and impossible to miss.
Tariffs are his nuclear bombers. The trade wars are not designed to be efficient or sensible.
They are designed to be frightening.
Trump wants the world to see a US president who is willing to inflict pain not only on rivals, but also on his own country.
In Trump’s world, economic suffering is not a failure. It is a message: I will do what you think I cannot.
Why tariffs are the perfect tool for disruption
Trade deficits are real, but Trump’s solution is deliberately blunt.
Tariffs slam entire economies without much precision. They trigger higher prices, broken supply chains, and stock market panic.
Traditional policymakers would see this as a reason to change course.
Trump sees it as proof that he cannot be reasoned with. The more the markets bleed, the more credible his threats appear.
This chaos is not random. It fits into a strategy that demands opponents act quickly to avoid greater losses.
Whether it is China, Europe, or even Canada, Trump’s goal is to force them to the table by making the cost of delay unbearable.
If the economy takes collateral damage, so be it. After all, if the markets recover later, he can claim victory. If they don’t, he will argue that the old system failed, not him.
Will Trump succeed?
For the Madman Theory to work, leaders must instill fear without destroying trust.
Trump often fails to maintain that balance. He threatens, backtracks, and contradicts himself. What begins as coercion often ends in confusion.
By now, most world leaders have already seen Trump’s playbook. His past behavior makes him more predictable, and acting crazy once again might not intimidate anyone.
Moreover, acting like a madman makes it hard for Trump to build trust if a deal is reached because no one believes he’ll stick to agreements.
An example is when Trump negotiated trade agreements with Mexico and Canada, celebrated them publicly, then later imposed tariffs against these countries.
He also openly brands himself as unpredictable, which breaks one of the theory’s core requirements.
The Madman Theory relies on ambiguity. Once you advertise your madness, it stops looking real.
When Trump threatened North Korea with “fire and fury” back in 2017, the bluff was called.
Trump later admitted he believed Kim was the real madman. That reversal shows the risk.
The strategy works best in autocracies, where erratic behavior can’t be checked by courts, press, or public opinion.
How Trump is testing America’s institutional strength
The madman theory works best in systems where leaders face no real constraints.
Dictatorships thrive on fear and unpredictability.
Democracies, on the other hand, are built to absorb pressure without collapsing.
Trump understands this. His tariffs are only one piece of a larger strategy to stretch America’s institutional fabric until it thins or tears.
The open legal battles to fire Fed Chair Jerome Powell show the same logic.
Trump is not just angry about interest rates. He is targeting the Federal Reserve because it is one of the few institutions built to resist political pressure.
By pushing cases through the courts that could weaken protections for independent agencies, Trump is setting the stage for a future where monetary policy could be dictated directly from the Oval Office.
No independent board. No economic orthodoxy. Just loyalty and obedience.
If that sounds far-fetched, consider how openly Trump’s inner circle is discussing it. Some are already laying out legal paths to make the Fed another executive arm.
His subtle hints at him running for another presidency while he’s not legally allowed adds more evidence to the stack that these are all part of a bigger plan.
The madman theory takes years to build, and Trump has been building his plan since his first run as President.
Trump did not rise through the ranks of a political party.
He is a businessman and he knows that exerting uncertainty is good for negotiations.
He never subscribed to any specific political ideologies. He has therefore convinced the public and the media that this is just his method of governance.
Why market panic is part of the plan
Since the beginning of the year, the stock market has dropped sharply as Trump’s tariffs multiplied.
Inflation fears have returned. Investors are rattled.
Commentators warn that the administration is shooting itself in the foot.
But in the framework Trump is working within, short-term panic serves a long-term goal.
A frightened market feeds the image of a reckless president who cannot be controlled by traditional economic logic. It keeps allies guessing.
It undermines the predictability that trade partners and domestic institutions rely on.
If Trump’s actions seem self-defeating, it is only because they are being judged by the wrong metrics.
Stability is not his measure of success. Instability is his proof of seriousness.
This is why he’s been going back and forth a lot lately.
One second he announces that tariffs will be relaxed, then changes his mind. He says that he will loosen up some policies, then announces otherwise.
When negotiators see a president who tanks his own markets without blinking, they wonder what else he might be willing to destroy.
The endgame
At the end of the day, the Madman Theory treats negotiations as zero-sum games.
Historically however, transformative international agreements result from collaborative, mutually beneficial negotiations rather than confrontational threats.
This is why Trump’s plan risks ending the same way Nixon’s did
But the biggest takeaway here is recognizing the logic behind the strategy.
If this is indeed Trump’s plan, there are only two outcomes.
Either it works, and America forces better trade terms from reluctant partners. Or it fails, and Trump is forced to retreat.
Either way, the markets will adjust. Businesses dislike uncertainty, but they adapt quickly.
The short-term pain we’re seeing now may not translate into lasting damage, especially for globally diversified companies that know how to operate through noise.
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