Canadian Prime Minister Justin Trudeau told executives gathered at an economic summit on Friday that he believes United States President Donald Trump’s desire to annex the northern nation “is a real thing” due to its abundance of critical minerals.

Trudeau made the remarks to dozens of business leaders and policymakers gathered in Toronto to discuss how Canada can diversify trade away from the U.S. given Trump’s tariff threats. The comments were confirmed by a senior government official who asked not to be identified discussing the closed-door meeting.

Since his election in November, Trump has repeatedly said Canada could avoid tariffs by becoming the 51st state. While the Trudeau government initially brushed off the comment as a joke, the jab took on a more menacing tone after Trump pledged in January to use “economic force” to compel the union and dismissed the border as an “artificially drawn line.”

Canada is rich in nearly three dozen critical minerals that are essential to modern technology, including mobile phones, electric vehicle batteries and defense applications. The country’s Natural Resources Minister Jonathan Wilkinson was in Washington, DC, this week, urging the U.S. to partner with Canada on mining projects to erode China’s dominance in the sector.

The Toronto Star first reported on Trudeau’s remarks, which were made after media were asked to leave the room. “They’re very aware of our resources, of what we have and they very much want to be able to benefit from those,” Trudeau said in response to a question, according to the Star. “But Mr. Trump has it in mind that one of the easiest ways of doing that is absorbing our country. And it is a real thing.”

Other political leaders in Canada have also said they are taking Trump’s annexation remarks seriously. British Columbia Premier David Eby said Monday that Trump is deploying a deliberate strategy to “destroy Canada’s economy” and drive it into becoming the 51st state. Federal New Democratic Party Leader Jagmeet Singh also views the sovereignty threat as real.

Trump signed an order Feb. 1 to put 25 per cent tariffs on most of what Canada and Mexico sell to the U.S., upending the countries’ longstanding trade agreement. Trudeau’s government responded by pledging similar levies.

On Monday, the two countries agreed to delay the tariffs for 30 days. But the threat of a broader trade war remains, as one of Trump’s first executive orders after inauguration asked officials to investigate and report back on the state of U.S. trade relationships by April 1.

“If those tariffs do end up coming in or the investigation into commerce tariffs that is scheduled for April moves forward, we need to be ready to respond robustly,” Trudeau said Friday, adding the country faces “what may be a more challenging long-term political situation with the United States.”

Executives attending Friday’s event included Kingsdale Advisors Chair Wes Hall, Linamar Corp. Executive Chair Linda Hasenfratz and Peter Tertzakian, an energy economist who is the founder of the ARC Energy Research Institute.

The summit, at a former brickworks factory-turned meeting space, underscores a broader concern in Canada that the country needs to urgently shift trade patterns and forge new international relationships in response to Trump’s policies.

“It should have happened 20 years ago, but the one thing that nobody in that room downstairs can build is a time machine. So we’re starting right now,” Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said on the sidelines of the summit.

Volpe said his industry, which supplies auto parts to the likes of Stellantis NV, General Motors Co. and others at assembly plants in Canada and the U.S., is unlikely to be able to diversify exports to Asia or Europe. Still, he said other industries should make a push to trade “east-west” rather than only shipping goods to the U.S.

“The best business case is always north-south,” he said, but shifting five per cent to 10 per cent of Canada’s exports to other markets is a way for the country to “get a win out of efforts like this.”

Transport Minister Anita Anand agreed.

“We have to make sure that we are trading with multiple partners in multiple locations,” she said. “Canada is the only G-7 country that has a free trade agreement with every other G-7 country.”

Bloomberg.com