When it comes to the economy, 'madman' antics could backfire on US

Some leaders pretend to be irrational to gain an advantage in negotiations. But the tariffs ploy will hamper growth everywhere.

- Vikram Khanna

In international relations, there is a strategic concept called the "madman theory". It refers to a leader deliberately acting irrationally and unpredictably to gain leverage in negotiations. The idea is to threaten reckless and extreme measures to force concessions from adversaries.

During the Vietnam War of the 1960s and 1970s, then US President Richard Nixon is said to have acted this way, encouraging his aides to make the North Vietnamese enemy believe he would do something crazy, to pressure them to engage in peace negotiations. The Nixon tapes later revealed that he told his national security adviser Henry Kissinger: "I want the North Vietnamese to believe I've reached the point where I might do anything to stop the war." Eventually, there were peace negotiations, so it could be argued that the madman theory worked in this case.

Another plausible exponent of the theory more recently is North Korean leader Kim Jong Un, who has consistently cultivated an image of volatility and unpredictability, conveying a readiness to use catastrophic force against South Korea, Japan and even the US, including through the first use of nuclear weapons, while at the same time expressing openness to negotiations. To the extent that this approach has kept adversaries off balance and consolidated his position at home, the case can be made that it has worked for him.

The trade policy of the Trump administration, which has included threats of triple-digit tariffs on China, some of the highest tariffs on the rest of the world for more than a century, and, recently, 50 per cent tariffs on the European Union, is an example of the madman theory applied to economic policy — probably for the first time by the US.

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