The U.S. Justice Department's antitrust division was directed earlier this week to pause all work with the Canadian government as the trade dispute between the neighboring nations intensifies, according to a report.

The chief of the antitrust division's international section, Lynda Marshall, ordered officials on Wednesday to halt all cooperation on cases and engagement on policy issues with Canadian authorities, without providing a reason for the directive, according to emails obtained by The Wall Street Journal.

Section chiefs in the antitrust division were also instructed in another email on Friday to provide lists outlining areas of cooperation with Canada by the end of the day, according to the newspaper.

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The DOJ disputed the report, saying in a statement that the "alleged direction was never given to anyone."

The division was asked to "temporarily hold off on a scheduled meeting on a specific investigation until the DOJ's antitrust team had more time to prepare," the department said.

This comes as the U.S. and Canada, which have been close allies for decades, continue to spar over President Donald Trump's trade war against Ottawa and subsequent targeting of the U.S.'s northern neighbor, which most recently included the president's executive order to rename Lake Ontario to "Lake America."

Although the renaming only applies to the U.S. federal government, while Canada, other international bodies and U.S. states are not forced to follow the rebranding, the order adds to the ongoing tensions between the two countries that arose following Trump's return to the White House in January 2025.

The trade war has led to tariffs on tens of billions of dollars in cross-border trade.

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The Canadian government said it would impose retaliatory tariffs on the U.S. beginning Sept. 8 in response to the Trump administration’s new 50% tariffs on about $20 billion worth of Canadian goods, which took effect last month.

Prime Minister Mark Carney said Canada "will match Washington's new tariffs dollar for dollar in order to protect Canadian workers, farmers, families, and businesses."

The Wall Street Journal and Reuters contributed to this report.