The Canadian government has issued an order that would block the state of Alaska from updating a ferry terminal unless the two sides resolve an ongoing dispute over the use of U.S. steel in the project.
The project is on Canadian soil that's leased by the state. The port at Prince Rupert is part of the Alaska Marine Highway System.
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Most of the funding for construction is expected to come from the Federal Highway Administration, which has "Buy America" requirements for steel, iron and manufactured products used in projects it funds.
Canada's minister of trade, Ed Fast, says the application of "Buy America" provisions on Canadian soil is an "affront to Canadian sovereignty."
Gov. Bill Walker says he believes the two sides will see their way through the situation.