By Paul Vieira
OTTAWA--Canadian Prime Minister Justin Trudeau said he believes President-elect Donald Trump's remarks about annexing Canada are meant to distract attention from the fallout American consumers face from a 25% tariff on all Canadian imports.
"That's something that I think we need to be focusing on a little bit more," Trudeau said in an interview Thursday with CNN.
"What I think is happening in this is President Trump, who's a very skillful negotiator, is getting people to be somewhat distracted by that conversation" about potentially higher prices for Canadian goods like energy, steel, aluminum and lumber.
In the interview, he reiterated that Canada won't become the 51st U.S. state, an idea Trump has floated. "That's not going to happen," said Trudeau, who announced his resignation this week.
Trudeau will remain prime minister until Liberal Party members pick a new leader.
The president-elect's explicit call on Tuesday to coerce Canada into the U.S. by "economic force" if necessary has produced uproar and an outpouring of patriotism in the country of over 40 million people.
Trump has pledged to slap a 25% tariff on all Canadian imports shortly after he takes office. He originally said the tariff would remain in place until Canada bolstered efforts at the border to limit the flow of illegal drugs and migrants into the U.S. Since then, Trump has complained about the U.S. trade deficit with Canada--which economists say is entirely due to energy sales--and Canada's military spending.
Canada has pledged over nearly $1 billion to add more border agents, and acquire helicopters and drones to help patrol activity. "That's a clear win for Trump," Trudeau said.
He reiterated that Canada would retaliate with tariffs on its own against U.S. imports should Trump follow through on his threat. "But we don't want to do that because it drives up prices for Canadians and it harms our closest trading partner," Trudeau said.
Economists warn a 25% tariff on all U.S.-bound Canadian goods and services would throw Canada into a recession, and fuel further weakness in the Canadian dollar.
Write to Paul Vieira at paul.vieira@wsj.com
