The United States and Canada have entered the final stage in prolonged trade talks. White House economic adviser Kevin Hassett said the sides are “very close” to a historic deal.
All last week, US Commerce Secretary Howard Lutnick held intensive talks with his Canadian counterparts. As the White House explained, the diplomatic process had previously got stuck due to domestic political chaos in Canada: local elections and the threat of the Alberta province withdrawal cancelled the settlement of any agreement.
Against the backdrop of trade progress, Kevin Hassett did not miss the chance to praise the national macroeconomy, calling the current situation in the US “one of the best in history.” The adviser estimated GDP growth at 3–4% this year and promised that the economy would accelerate even more thanks to an imminent drop in energy prices. Hassett referenced Donald Trump, who guaranteed that fuel prices would “plummet like a stone.”
However, optimism of officials clashes with harsh market reality. Energy prices remain stubbornly high due to the ongoing war with Iran. Tehran has effectively blocked the Strait of Hormuz, through which 20% of the world’s oil exports pass. Gasoline prices are unable to fall due to this logistical bottleneck, so annual inflation in the US predictably picked up to 3.7% in September from 3.4% a month ago.