President Trump believes he holds the upper hand in his developing relationship with Zohran Mamdani, according to a source who helped arrange last week’s unexpected meeting at the Oval Office. Trump on Friday surprised voters and political observers when he praised New York City’s mayor-elect as a “rational person” who “has a chance to really do something great for New York,” The New York Post reported.

Trump had previously labeled Mamdani a “100 percent communist lunatic” and criticized his positions on taxes, policing, and Israel, as well as his refusal to condemn the phrase “globalize the Intifada.”

Mamdani, who has called Trump a “fascist” and a “despot,” described the pair as having a “shared purpose.”

Behind the scenes, the meeting was brokered by a New York business leader close to Trump who believes the president should take a long-term approach with Mamdani for the good of the city and for Trump’s policy goals, particularly involving deportations, according to sources.

That outreach came after a top official in Mamdani’s inner circle approached the business leader, according to people familiar with the matter.

The message from Mamdani’s transition team was that the incoming mayor, who had challenged Trump in his election-night speech to “turn the volume up,” now wanted to smooth relations with the White House.

The official indicated Mamdani understands he will need help from the administration to pay for several of his major spending proposals and to balance the city’s budget as required under state law.

Sources said Mamdani, a 34-year-old assemblyman and former rapper, was briefed on the $7.5 billion in federal funding New York City receives each year.

That money is considered essential to his agenda and could be restricted by the president.

“He faces a $17 billion budget deficit in the next fiscal year to pay for all the free stuff he’s proposing,” said the business leader who helped arrange the meeting and urged Trump to take it.

“Even if Gov. Kathy Hochul agrees to raise taxes, he still faces a multibillion-dollar shortfall,” the person said.

“He needs Trump and Trump knows it.”

“Trump is playing nice for now,” the person added.

“But if Mamdani doesn’t allow deportations, or defunds the police or goes full on communist, Trump is ready to lower the hammer.”

A White House press representative had no comment.

A spokesman for Mamdani also had no comment.

Trump is seen as holding leverage because state law requires the mayor to balance the budget.

But sources cautioned that the warm tone may not last.

Trump remains skeptical of Mamdani and is expected to tie federal funding to whether the mayor moderates his economic and cultural agenda in New York City, where Trump still maintains significant business interests.

Sources said Mamdani had agreed ahead of the Oval Office meeting not to antagonize Trump and to keep the discussion centered on the city’s affordability issues.

“What I really appreciate about the president is the meeting that we had focused not on places of disagreement, which there are many, but also focused on the shared purpose that we have in serving New Yorkers,” Mamdani said.

New York City faces a projected budget shortfall of up to $8 billion in the next fiscal year.

Estimates show the deficit widening to as much as $17 billion when factoring in Mamdani’s proposals for free bus service, expanded housing spending and items such as subsidizing trans care for minors.

Those financial pressures could make Mamdani more reliant on Trump and the administration.

Some observers say that is already visible in his plan to reappoint NYPD Commissioner Jessica Tisch, a tough-on-crime figure, and in his support for House Minority Leader Hakeem Jeffries over a challenger backed by the Democratic Socialists of America.

“Trump is not worried about Mamdani,” said another city business leader.

“He has a ‘plan B’ if Mamdani misbehaves.”