The U.S. and Canada are scrambling to avoid new tariffs and seal a trade deal. Here’s what could be in it.

Negotiations between the U.S. and Canada entered a critical phase on Friday, with officials holding additional talks aimed at averting a fresh round of tariffs. The last-minute diplomatic push signals that both sides recognize the economic cost of a breakdown, even as the specifics of a potential agreement remain in flux. Details from the discussions have begun to emerge, though any final terms are still subject to change.

For investors, the stakes are considerable. Trade policy has been a persistent source of volatility, and a deal would likely ease uncertainty for industries with deeply integrated cross-border supply chains, such as autos, agriculture, and energy. A failure to reach an agreement, by contrast, could renew pressure on business confidence and raise input costs for manufacturers in both countries.

The key watchpoints now are clarity on the deal's scope and the tone of official statements. Markets will be looking for signals on whether the agreement is broad and durable or a narrow, temporary fix. Until concrete language is published, the details of what a final pact covers—and how quickly it can be implemented—will remain the primary driver of trade-sensitive asset prices.