Trump’s trade war strategy and the ‘madman’ logic: RS
3 Min Read
In Responsible Statecraft, Joshua Schwartz warns that Trump’s trade war, modeled on the madman theory, is backfiring at home and weakening US leverage abroad.
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US President Donald Trump speaks during an event to announce new tariffs in the Rose Garden of the White House, April 2, 2025, in Washington, as Commerce Secretary Howard Lutnick listens. (AP)
Is Donald Trump's trade war a calculated move or a reckless gamble? In his opinion piece for Responsible Statecraft, Joshua Schwartz contends that while Trump’s tariffs may appear to be part of a larger negotiating strategy, they are ultimately built on a misapplication of the "madman theory", a strategy rooted in Cold War nuclear logic that is ill-suited to the complexities of modern global trade.
Schwartz explains that the madman theory, originally conceived by Daniel Ellsberg and Thomas Schelling, relied on the idea that irrational threats might be more credible in international politics. Richard Nixon famously tried to use this approach in Vietnam, hoping adversaries would capitulate to what they perceived as a dangerously unpredictable leader.
Trump, Schwartz notes, has attempted a similar tactic, using tariffs as a blunt instrument to pressure trade partners while cultivating an image of unpredictability.
In one cabinet exchange over trade with South Korea, Trump reportedly said, “You tell them this guy’s so crazy he could pull out any minute.” This echoed Nixon’s own words, “We’ll just slip the word to them… we can’t restrain him when he’s angry.”
Domestic backlash exposes limits of madman strategy
Despite some short-term foreign concessions, Schwartz argues that Trump’s application of the madman theory suffers from a fatal flaw: it alienates domestic support.
The Yale Budget Lab estimates that Trump’s tariffs could cost the average American household nearly $5,000 this year alone. Schwartz’s peer-reviewed research shows that the more a leader is perceived as erratic, the more likely they are to lose public trust, a liability that undermines their global leverage.
“For the typical American household, the tariffs will mean a loss of about $1,200 in purchasing power, according to the Budget Lab at Yale University, a nonpartisan research center.” https://t.co/76UQAEB19T
— The Budget Lab (@The_Budget_Lab) February 1, 2025
Quoting Hamilton and Nixon, Schwartz highlights a recurring lesson in American politics: the public demands competence, not chaos. Nixon himself privately acknowledged in 1973 that “we are never going to have a madman as president… Ours throws them out.”
Economic pain weakens Trump’s negotiating hand
In Responsible Statecraft, Schwartz points out that Trump’s strategy, while bold, is undermined by predictable psychological patterns. Loss aversion makes citizens more sensitive to higher prices than they are enthusiastic about potential long-term economic gains. This creates pressure to retreat, which is exactly what happened when Trump paused tariffs for 90 days, prompting China and others to question his resolve.
“[Chinese leader] Xi learned that his adversary has a pain point,” Schwartz quotes from a New York Times report, suggesting that the bluff had been called. Once Trump showed signs of backing down, the illusion of irrationality, and thus the strength of the madman strategy, collapsed.
Trump’s coercive strategy is unsustainable
Schwartz concludes by warning, in Responsible Statecraft, that while the madman theory may contain some theoretical merit, its practical flaws, especially in the realm of economic policy, make it an unsound foundation for international trade. The backlash from both the American public and the business community, along with the erosion of US credibility, signals that this is not a sustainable approach.
Rather than coercion through chaos, Schwartz calls for a return to strategies that reflect American values and long-term global leadership, not improvised brinkmanship masquerading as genius.
