Morning from Copenhagen.

Trump is after Powell once again, even after Bessent successfully calmed markets last week, which clearly shows that there is no such thing as a credible U-turn—Trump will likely always be afraid to lose face if Bessent and Lutnick run the show too much.

Lutnick was out late yesterday revealing a confirmed trade deal, saying it was “done, done, done, done,” but he wasn’t willing to name the country with whom the deal was made—which is noteworthy. There is obviously the scenario where he’s simply lying and that it was an awful attempt at calming markets (it didn’t really move markets either, so in that sense, feasible). However, the more likely scenario is that the country involved is playing with high stakes given their current trade ties with China—let alone the risk of publicly announcing it. We know there are a handful of countries in Asia where China would be fuming if it became public knowledge that India, South Korea, or the like entered an official trade agreement with the U.S.

Especially given that it looks like U.S. companies are frontloading/trading more with Europe than ever before. The U.S. now has a larger trade deficit with Europe than with China for the first time in decades, which is probably why China is so attentive to who the U.S. makes deals with: China is losing market share as U.S. demand for Chinese goods shrinks while India, South Korea, and other neighboring countries are making deals with “the enemy.”

Chart 1: The U.S. now has a larger trade deficit with Europe than with China