By Phil Mattingly, CNN

(CNN) — In the end, President Donald Trump got exactly what he wanted.

The 120 days since Trump’s Rose Garden “Liberation Day” announcement rocked financial markets weren’t exactly pretty.

From the Washington to Wall Street and across foreign capitals far and wide, seemingly every day featured a disorienting burst of TACOs (trades based on the notion that “Trump Always Chickens Out”) and turbulence, theater and threats, carveouts and looming fear of an imminent rupture to the backbone of 70 years of global commerce.

Even today, an explicit declaration of victory would seem shortsighted in the face of economic data that has presented steady stream of contradictory signals and warning signs that in many ways mirror the disorienting nature of a trade policy without modern historical precedent. The executive authority Trump triggered to underpin a wide swath of his tariffs faces an acute risk in court. Trump’s tariff approach remains deeply unpopular in public polling.

But as the world approached Trump’s August 1 “reciprocal” tariff deadline, Trump and his economic advisers share an unmistakable sense of vindication.

Bilateral deals with major trading partners have rolled in over the last week. The average effective tariff rate on imports to the US sits at its highest level in nearly a century. Tariff revenue is soaring. Financial markets have settled, and stocks have bounced consistently around record highs in recent weeks. Predictions of soaring inflation haven’t come to fruition. The broader US economy has remained remarkably resilient through it all.

There’s no hedging from a West Wing keenly aware of their distinctly minority position on the efficacy of Trump’s tariffs over the course of the last four months.

“Maybe the losers and haters were really just losers and haters,” a senior White House official said.

For all the volatility in the weeks after Trump’s April 2 “reciprocal” tariff announcement, Trump and his economic advisers held firm in the belief that they’d reach this point. It was a position that ran counter to just about every mainstream economist, was an anathema to the national security and economic pillars of the post-World War II era and cemented the long-running – but no less stunning – ideological evolution on tariffs within the Republican Party that Trump launched with his first presidential campaign.

But at its core was a concept that been a consistent throughline of an otherwise chaotic economic timeline: leverage.

Trump’s unorthodox view of tariffs

That leverage came from the singular importance of the US market to the global economy. Trump’s personal belief in the utility of tariffs – and willingness to let them go into place and then, if necessary, escalate to shut down any retaliatory efforts – only served to enhance that reality.

“The dynamic starts to shift pretty dramatically when you realize your counterpart is willing to shoot the hostage,” an EU official told CNN after Trump clinched an agreement with the bloc.

The Wall Street vs. Trade Warrior construct that defined Trump’s first economic team was rife with bureaucratic knife fights, profanity-laced shouting matches and, on more than one occasion, aides on the verge of physical altercation.

From the outside, the 2.0 version of Trump’s team had initially been viewed in a similar manner, with former hedge fund manager and Treasury Secretary Scott Bessent and National Economic Council Director Kevin Hassett in the “Wall Street” camp and top trade adviser Peter Navarro, Commerce Secretary Howard Lutnick and Stephen Miller, the deputy chief of staff for policy, filling the “trade warrior” roster.

While there have been differences on strategy and scale, that simply perception never meshed with reality behind the scenes. Most importantly, unlike in Trump’s first term, when advisers like Gary Cohn and Steve Mnuchin made overt efforts to limit the president’s tariff impulses, the president’s advisers this time have all been explicit that they aren’t there to chart their own path. Trump decides, and they execute, whether it was their preferred option or not, White House officials say.

Trump’s first term featured sweeping tariff threats that were inevitably met with resistance within Trump’s own advisers and moderated before ever reaching the implementation point.

But Trump did launch a trade war with China, which marked a significant tariff escalation that ran counter to decades of free trade consensus. The results were panned by mainstream economists who saw limited benefit. Trump and his pro-tariff advisers took an entirely different set of lessons away from the effort – lessons that laid the groundwork for a dramatically more expansive tariff approach in a second term tied directly to the leverage provided by the US market.

‘Really poorly understood’

Stephen Miran walked to the lectern to deliver remarks at a Washington think tank during a moment of global market chaos. Five days after “Liberation Day,” stocks were in the midst of their worst three-day percentage drop since the onset of the Covid Pandemic five years prior. The bond market was sending unnerving signs about faith in US stability.

Miran, the chairman of the White House Council of Economic Advisers, didn’t portray any similar anxiety as he began remarks outlining Trump’s view that the global trading system had put the US at a disadvantage and didn’t adequately account for the benefit derived from the security and stability provided by US. Quite the opposite.

“Most economists and some investors dismiss tariffs as counterproductive at best and devastatingly harmful at worst,” Miran said to the audience. “They’re wrong.”

Miran viewed the speech as an opportunity to explain a strategy White House officials thought was deeply misunderstood outside of the building.

“What was going through my mind is that these things were really poorly understood and that people don’t understand what’s going on,” Miran said in an interview this week with CNN. “There’s a tendency to think that history began yesterday—that the status quo ante is inherently fair and any attempt to disrupt it is unfair. But that’s simply not true.”

Miran used his remarks to lay out the economic case for why White House officials insisted there would be limited retaliation to Trump’s sweeping tariffs and US consumers wouldn’t bear the burden of the increased costs they would impose. Steep US trade deficits, Miran said, underscored the limited options trading partners had when it came to the US market. That would limit retaliation and incentivize exporters to either eat the cost of the tariffs as the US benefitted from spiking tariff revenues or strike a deal with Trump.

“They failed to appreciate the amount of leverage that the United States has,” Miran told CNN of the widespread fear of a retaliatory spiral that would grip the global economy and short-circuit any trade agreements. “They just failed to appreciate that. President Trump knows, and he understands, the amount of leverage that the United States has and knows how to use that leverage in ways that nobody else could.”

That leverage would form the basis of the steady stream of trade agreements Trump has announced in the lead up to the deadline.

But it didn’t start that way.

‘They didn’t think that we were serious’

As the shock of Liberation Day gave way to grappling with the reality, Trump’s top trade negotiators – Bessent, Lutnick and US Trade Representative Jamieson Greer – were flooded with proposals from countries around the world. Those proposals, however, weren’t drafted anywhere near a level that would pass muster with Trump, officials said.

Instead, after Trump paused the tariffs on April 9 to allow for negotiations, several large trading partners approached their US counterparts with a belief that a combination of retaliatory threats and general tariff reductions would force the White House to change course.

“At the time they didn’t think that we were serious, and they thought that just by threatening to retaliate that they would get us to back off,” Miran said. “They weren’t serious about negotiating to get to a real deal. Given the extent to which he loves tariffs, getting the President to agree to a deal wasn’t going to be some easy thing.”

Trump’s recognition of that dynamic often drove new tariff threats that arrived seemingly out of nowhere at all hours on his Truth Social account.

A similar tactic was deployed to brush back companies who made the mistake of publicly acknowledging potential price increases. The strategy had a deep impact on C-Suites around the country, according to interviews with more than a dozen corporate executives and lobbyists.

“It becomes a business decision,” one executive told CNN. “The cost benefit of putting a target on your back with this particular administration simply doesn’t net out in your favor.”

Still, several executives warned that price increases were nearly inevitable in the months ahead and on earnings calls and inside the economic data there have already been signs that hikes are hitting the most exposed products.

Declaring victory

Wall Street, however, has in many ways moved on from the initial weeks spent on a perpetual hair trigger.

“He kind of beat everyone into submission,” one bank executive told CNN. “I guess everyone came to terms with a reality of much higher tariffs, but not as high as they could’ve been, and just decided to call it a win and move on. It’s kind of wild when you think about it.”

The same could be said for the months of trade negotiations that are steadily coming to conclusion.

Trump didn’t clinch 90 deals and 90 days – the often-repeated line from Navarro in the immediate aftermath of the April tariff pause. But he was often the reason why, officials say, noting that at several points Trump’s negotiating team brought draft agreements to him for his sign off, only to be sent back to the table.

Hints of that dynamic, which played out behind closed doors, were apparent as Trump’s advisers repeatedly insisted over a period of months that a deals were imminent.

“We all believed it when we said it - we weren’t lying,” Miran said when asked about the public comments. “The reality is the president makes all the big decisions and he’s taken these offers and taken them further anyone would have predicted.

The recent announcements, in rapid succession, have managed to maintain a significant tariff on all imports in the roughly 15% range while including concessions on market access for US producers and commitments of hundreds of billions of dollars in purchases of US goods or for Trump’s own use as investments to address US supply chain vulnerabilities.

The structure and priorities within each deal underscored the degree to which Trump has been personally involved in nearly every aspect of any final agreement, right down to using a sharpie to cross off the proposed investment number from Japan that he wanted to be $100 billion higher.

Japanese negotiators, who were seated across from Trump in the Oval Office, accepted the terms.

Trump’s advisers acknowledge their ability to avoid the litany of worst-case scenarios didn’t happen in a vacuum. US consumers continued to spend. Trump’s cornerstone legislative agenda priority – a sweeping tax cut package – was signed into law removing another huge uncertainty from the US economy. The one country that did retaliate – China – remains the most significant economic challenge and risk as talks between the world’s two largest economies continue and are based almost entirely upon avoiding a new round rapid escalation.

Federal Reserve Chair Jerome Powell once again reiterated his view this week that the impact of Trump’s tariffs are still too difficult to assess with certainty and have only just now begun to filter down toward consumers – something that is expected to happen with more regularity in the months ahead.

Trump, however, has declared victory – and his top economist believes the same.

“The One Big Beautiful Bill is passed, and the trade deals are settling,” Miran said. “The uncertainty concerning many is resolving. I think we’re setting up for a much, much stronger second half of the year.”

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