Sustainable Finance Newsletter: The 'madman theory' of US-Iran negotiations

Pershing Square Holdings

08/04/2026 16:23

This is the weekly Reuters Sustainable Finance Newsletter, which you can sign up for here.

By Ross Kerber

April 8 (Reuters) - To understand the unfolding war between the U.S., Israel and Iran I thought it would be useful to hear from a business negotiations expert. You can read some takeaways in my column this week, linked below, including some data points to judge whether sneak attacks and diplomatic intimidation actually work.

I've also included links to a great read about AI in Bollywood, news about critical vote recommendations at BP, and some health-care-financing advice.

Please follow me on LinkedIn and/or Bluesky. You can reach me via ross.kerber@thomsonreuters.com

The "Madman Theory" of US-Iran negotiations

Former U.S. President Richard Nixon was famously described as pursuing a "madman theory" in his approach to wartime negotiations, creating the perception that he was capable of any destruction to cow adversaries. For Nixon, the historian Zachary Jonathan Jacobson wrote, "the ploy pivoted on the idea that he did not consider himself to be mad. He considered himself crafty."

The theory hardly led to long-term success in the Vietnam War, but it has been trotted out to explain the current outlook of U.S. President Donald Trump in his  campaign against Iran. Trump has always styled his negotiations with a brash approach seemingly out of New York real-estate circles.

He even began bombing as indirect talks with Iran were under way -- recalling the "sneak attack" strategy Japan once used to destroy the U.S. fleet at Pearl Harbor in 1941. That attack also jolted the U.S. out of its isolationist mood during World War Two, although it's not clear Trump remembers that outcome based on my colleagues' reporting.

Will Trump's method work? Leaving the diplomatic and military questions to others, I thought it could be useful to speak with a bargaining expert who knows the increasingly connected worlds of business and geopolitics.

You can click here
     to read my conversation with Cody Smith, a lecturer on negotiation and conflict resolution at Columbia University, and co-founder of the negotiation advisory and training services company CNCM. We spoke about the role of trust and best-alternative scenarios, the role of unpredictability, and how threats have played out such as in union-management negotiations.

We spoke on Tuesday, before Trump announced a two-week ceasefire, but the comments still seem relevant.

COMPANY NEWS

BP BP.L faces critical shareholder vote recommendations from major proxy advisers ISS and Glass Lewis over its decision to block a climate resolution and efforts to unwind previous climate reporting efforts.

As Air India grapples with losses and heightened regulatory scrutiny after a crash, it said its CEO Campbell Wilson has resigned after nearly four years in the job.

In the latest twist in his quest to take over Universal Music Group,UMG.AS billionaire investor Bill Ackman's Pershing Square proposed a $64 billion cash-and-shares offer that values the music label giant 78% more than its prior closing price.

ON MY RADAR

Don't miss this big look by colleague Munsif Vengattil about how India’s studios are using AI to slash production time, cut costs and dub movies, "pitting efficiency against questions of creative authenticity and audience acceptance."

U.S. Treasury Secretary Scott Bessent faced questions from Democratic lawmakers on whether giant tankers that ship liquefied natural gas qualify for a big tax credit meant for small boats that burn the fuel.

This story looks like a profile of a Chicago content creator but quickly shapes up as a sobering look at the extra monthly costs borne by young people suffering chronic illnesses. I read it as both the case for Health Savings Accounts and better public health coverage in general.

 (Reporting by Ross Kerber; Editing by David Gregorio)

 ((ross.kerber@thomsonreuters.com; (617) 412 0093;))