Canadian and US negotiators are expected to meet again as both sides make a final push to reach an agreement before the US midnight tariff deadline, according to CBC News. The development offers some hope that diplomacy remains active, though it comes against a backdrop of considerable uncertainty for one of North America’s most closely watched trade relationships.

Earlier in the session, FOX Business White House correspondent Edward Lawrence reported that a White House official said Trump and Carney had discussed the planned retaliatory tariffs but failed to reach a resolution that would prompt the president to delay them. That report weighed on the Canadian dollar, which came under renewed pressure as markets interpreted the lack of a breakthrough as a sign that the tariffs were still likely to take effect.

The latest news suggests the matter may not be settled yet. Canadian trade officials have been in Washington negotiating with US representatives, but several key issues remain unresolved, including US tariffs on Canadian vehicles and broader disputes over market access. Those issues matter because they sit at the center of the bilateral trade framework that has helped keep goods moving between the two countries, so even a short delay or last-minute exemption could have immediate implications for exporters and currency traders watching the deadline closely.

The US is threatening to impose 50% tariffs on around $20 billion of Canadian imports, with the measures scheduled to take effect at 12:01 a.m. Wednesday. The tariffs would apply to goods that had previously benefited from preferential treatment under the US-Mexico-Canada Agreement.

A genuine last-minute breakthrough — or even a postponement — could see the Canadian dollar rally in the short term. If the talks fail, the loonie could extend its losses in the coming days, unless a surprising US-Iran deal weighs on the US dollar.