The United States has threatened to pull the F-35 fighter jet from a competition to replace Canada’s ageing aircraft fleet as a widening trade policy dispute continues to cause tension between the two neighbors.

Axar.az reports citing Press TV that, on the hunt for a viable warplane to renovate its fleet of old CF-18 Hornet warplanes, Canada is expected launch the major acquisition program at the end of May.

The US government is refusing to chime in over Ottawa’s insistence on requiring the winner to invest the equivalent of the acquisition cost in Canada under its Industrial and Technological Benefits (ITB) Policy, according to a letter obtained by defense analyst Richard Shimooka.

Canada has reportedly set aside $26 billion for the aircraft purchase, making it one of the country’s biggest-ever military programs. However, the increasing price tag and continuing questions over the best aircraft to meet Canada’s needs has kept Prime Minister Justin Trudeau, a Liberal, from getting the program off the ground.

The letter, addressed to the Canadian government and published Monday by the Macdonald-Laurier Institute think-tank, is written by US Navy Vice Admiral Mathias Winter in December 2018 and clearly states that the Canadian Royal Air Force will never receive an F-35 bid if the country insists on its ITB demands.

“If the ITB requirement remains in effect, an F-35 offer will not be provided,” said the letter. “We look forward to Canada reaffirming its status as an F-35 partner and hope the ITB issue will be resolved quickly so the F-35 is able to compete.”

“The F-35 supplier team will submit an F-35 offer only if (1) the ITB requirement is waived entirely and (2) there is no future ITB obligation arising from selecting the F-35,” it added.

The dispute adds to a list of disagreements between the Trump administration and the government of Trudeau. The two countries are already trading blows over a decision by Trump last year to increase tariffs on Canadian steel and aluminum.

The two neighbors are also in the middle of a policy change process to implement the USMCA, the renegotiated North American Free-Trade Agreement (NAFTA), which also includes Mexico.