A couple of days ago (and on any number of other occasions), I suggested equities were perhaps too sanguine about what it’s fair to call rampant uncertainty on several fronts at the dawn of Donald Trump’s second term in The White House.

I’m not a huge fan of so-called “uncertainty indexes,” but I do use them occasionally, mostly as garnish, if you like.

The figure below shows the global version of the oft-cited Baker, Bloom and Davis metric. It’s the GDP-weighted average of national economic policy uncertainty gauges for 20 countries, including all G7 nations and China.

As you can see, average uncertainty spiked in November, when Trump was reelected in the US, and rose further last month. It’s now the highest of any month outside of May 2020, when large swathes of the global economy were still in an induced coma.

Suffice to say when it comes to global uncertainty, Trump’s a variable no less indeterminable than a plague.

He’d have it no other way. Trump’s the world’s biggest fan of the “madman theory,” especially when it comes to trade. The idea’s simple: If everyone thinks he’s crazy, they’ll placate him to avoid bad outcomes, or even just to avoid talking to him.

It’s not the worst strategy in the world, but it can be dangerous, and it’s important that madman theory practitioners have the introspection to occasionally ask themselves if it’s not an act: “Gosh, am I actually crazy?” Trump doesn’t know the meaning of the word “introspection.”

If we’ve learned anything this week about Trump’s “2.0” trade strategy, it’s that there isn’t one — a strategy, I mean. There’s no plan. There’s not even “a concept of a plan,” as he famously put it, while musing about health care reform during his only debate with Kamala Harris.

Campaign trail Trump was going to “tariff” (an action verb for him) everybody, and at cartoonish levels. Day-one Trump didn’t tariff anyone, at any level — he issued a memo to US government agencies instead, calling for “study.” Later that same day, Trump said he was “thinking” about February 1 for 25% levies on Canada and Mexico. Day-two Trump said China could face a 10% tariff from February 1 “based on the fact they’re sending fentanyl,” and also said Europe might “be in for tariffs” too because “they treat us very, very badly.”

Again, there’s no plan, and even if you want to insist on calling Trump’s wildest bombast a “strategy,” Trump’s hardly the first person in history to leverage maximalist rhetoric to extract concessions. That’s not just dealmaking 101, it’s common sense. As I put it earlier this month, “Every child knows you start by demanding ice cream for breakfast and lunch and dinner, and then you go from there.”

For now, it may actually be preferable for stocks to just ignore Trump on trade, because he plainly hasn’t decided what he wants to do. The yawning gap between his “worst” impulses (60%-100% tariffs on everything from anybody) and his more sedate threats (10% on China as a slap on the wrist for countenancing the flow of fentanyl precursor to the Sinaloas) makes it impossible to get a read on where he might actually land. He’d tell you that’s on purpose (i.e., the madman theory), I’d tell you he’s just scatterbrained. (Who you gonna believe?)

Many market observers are inclined to the notion that the earliest signals from Trump point in the direction of a softer-than-expected approach. “What we’ve learned over the last 48 hours is that the most aggressive stance the President is going to take is 25% tariffs on Mexico/Canada, 10% on China and further levies of some magnitude on the EU,” BMO’s Ian Lyngen said Wednesday. “From the perspective of the Treasury market at least, the price action appears to be signaling that investors feared that the outcome could have been worse.”

Even the Chinese foreign ministry sounded a cautiously optimistic tone. “Despite all the differences and frictions, the [US and China] enjoy tremendous common interests and space for cooperation,” a spokesman ventured, in remarks to the press yesterday. Beijing, he went on, is prepared to work with Trump to “improve relations from a new starting point.”