US Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland were unable to clinch a deal despite meeting late into the evening on Thursday. They reconvened on Friday morning, with Mexico on standby to return to talks aimed at ending a year of hard-fought three-way negotiations.

But Canadian officials are now expressing concern that a final NAFTA deal will not be concluded on Friday, Canada's Globe and Mail newspaper reported, citing a source familiar with the situation.

Treasuries have benefited from rising trade tensions, as investors see them as a safe-haven investment and the most likely beneficiary of Trump's protectionist policies. The 10-year yield was down 1.2 basis points from Thursday's close, last at 2.848 percent. The 30-year bond yield was down 1.5 basis points, last at 2.992 percent.

"I think (Friday's bid on Treasuries) is about uncertainty on whether this NAFTA trade deal is going to get done by the US-imposed deadline," said Lou Brien, market strategist at DRW Trading.

He added that the market's movements on Friday may be exacerbated by reduced liquidity ahead of a holiday weekend.

Trade tensions had also ratcheted up after the European commissioner in charge of trade on Thursday said the European Union's detente on tariffs with the United States had not put to rest "profound disagreements" on trade policy. A Bloomberg report that Trump was considering implementing $200 billion worth of new sanctions on Chinese goods next week also added to trade tensions.

The yield curve was modestly flatter, continuing a trend that began on Tuesday, with longer-dated securities falling faster those with shorter maturities. The spread between the two- and 10-year notes, a measure of the shape of the yield curve, narrowed to 19.9 basis points, approaching the 11-year low of 18.3 basis points hit on Aug. 27. The two-year note yield was down 1.2 basis points over the same period, last at 2.641 percent.

Heading into the coming week, analysts said buying of Treasuries is unlikely to let up. Yields fell on Thursday after Argentina's central bank hoisted its benchmark interest rate 15 percentage points to 60 percent, pulling the country's peso down 20 percent and sending emerging market investors to safer places.

Investors were looking for signs on Friday that Argentina would unveil a fiscal package austere enough to ease fears about the government's ability to pay its debt next year.