How Trump Used U.S. Leverage to Reshape Global Trade on His Terms

President Donald Trump’s unorthodox approach to tariffs and global trade has produced a result his administration says was always the goal: a series of new bilateral trade agreements and a U.S. market leveraged to gain favorable terms.

The months since Trump’s “Liberation Day” tariff announcement have been marked by volatile financial markets, fears of economic disruption, and warnings from mainstream economists. Despite these warnings, Trump held firm to a strategy built on the unique leverage of the U.S. economy.

By leaning on that leverage and threatening steep tariffs, Trump secured agreements from major trading partners. As the August 1 tariff deadline approached, deals rolled in, leaving the U.S. with an average effective tariff rate at its highest level in nearly a century. Markets, which initially reacted with alarm, have since stabilized, and stocks have risen near record highs.

Trump’s advisers credit a willingness to endure short-term volatility in order to bring foreign partners to the table. “They failed to appreciate the amount of leverage that the United States has,” said Stephen Miran, chairman of the White House Council of Economic Advisers.

Behind the scenes, Trump personally drove negotiations, often rejecting draft deals to demand better terms, including direct concessions for American producers and investments aimed at supply chain security. In one instance, he increased Japan’s proposed investment commitment by $100 billion before signing.

Although some executives warn that higher prices will eventually reach consumers, the administration points to tariff revenue, strong consumer spending, and a resilient U.S. economy as validation of its approach.

Federal Reserve Chair Jerome Powell has cautioned that the full effects of these tariffs are still developing, but Trump and his team have declared success, framing the trade outcomes as part of the economic impact of his broader agenda.

Credit: CNN Newsource

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