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CNBC Exclusive: CNBC Transcript: Canadian Prime Minister Justin Trudeau Speaks with CNBC’s Susan Li on “Squawk on the Street” Today

WHEN: Today, Thursday, March 31st

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Canadian Prime Minister Justin Trudeau and CNBC's Susan Li on "Squawk on the Street" (M-F, 9AM-11AM ET) today, Thursday, March 31st. Following are links to the video on CNBC.com:http://video.cnbc.com/gallery/?video=3000505926 and http://video.cnbc.com/gallery/?video=3000505930.

All references must be sourced to CNBC.

SUSAN LI: HI, BRIAN. YEAH, THANK YOU SO MUCH. LET'S GET TO IT. THE HONORABLE PRIME MINISTER JUSTIN TRUDEAU JOINING US TODAY. GOOD TO SEE YOU, PRIME MINISTER.

JUSTIN TRUDEAU: EXCELLENT TO BE HERE.

LI: SO LET'S FIRST TALK SECURITY AND BRUSSELS, OF COURSE, REIGNITING THE DEBATES OVER IMMIGRATION. CANADA HAS TAKEN IN 25,000 SYRIAN REFUGEES SINCE DECEMBER. WHAT DO YOU SAY TO THOSE THAT SAY THAT ALLOWING IMMIGRANTS FROM THE MIDDLE EAST OR NORTH AFRICA MAKES YOUR COUNTRY LESS SAFE?

TRUDEAU: I THINK, OBVIOUSLY, ANY TIME YOU'RE ACCEPTING A VISITOR, A TOURIST, A RESIDENT, A REFUGEE INTO YOUR COUNTRY, THERE ARE SECURITY RISKS. AND WHAT WE'VE DONE IS UNDERSTOOD THAT YOU SEPARATE SECURITY RISKS FROM YOUR IMMIGRATION POLICY. YOU RECOGNIZE THAT YOU NEED TO DO EVERYTHING TO KEEP CANADIANS SAFE AND YOU MAKE SURE YOU'RE DOING EVERYTHING YOU NEED TO ON SECURITY. BUT YOU'RE NOT DENYING THE FACT THAT WE ARE COUNTRIES THAT HAVE BEEN MADE GREAT BY IMMIGRATION OVER THE DECADES AND OVER THE CENTURIES. AND DRAWING PEOPLE IN IS PART OF WHAT IS GREAT FOR OUR ECONOMY AND OUR SOCIETY.

LI: NOW THAT INCLUDES WORKING WITH YOUR BIGGEST NEIGHBOR AS WELL, AND RECENTLY, YOU'RE HERE IN D.C. ON YOUR OFFICIAL VISIT AND ENGAGING IN INFORMATION-SHARING, NO-FLY LISTS AND OTHER SORTS OF LISTS WITH THE U.S. GOING FORWARD, DO YOU FEEL CONFIDENT THAT YOU CAN KEEP CANADA SAFE FROM TERRORIST ATTACKS?

TRUDEAU: WELL, I THINK PART OF MAKING SURE THAT WE HAVE A GOOD RELATIONSHIP WITH THE UNITED STATES AND, INDEED, THE WORLD, IS ENSURING BOTH THE SECURITY OF OUR BORDERS AND THE SAFETY OF CANADIANS, BUT ALSO A CONSTRUCTIVE, POSITIVE ENGAGEMENT WITH THE WORLD, AND THE AGREEMENTS WE'VE SIGNED AROUND BORDER SECURITY, WHICH WILL BOTH KEEP PEOPLE SAFER AND ALLOW FOR THIS EASIER FLOW OF GOODS AND PEOPLE OVER THE BORDER IS GOOD FOR TRADE AND IT'S GOOD FOR OUR COUNTRIES.

LI: YES, BUT HAVE THE EVENTS IN BRUSSELS MAYBE CHANGED YOUR VIEW ON HOW TO MAYBE PROTECT CANADA?

TRUDEAU: WELL, I THINK WE NEED TO MAKE SURE WE'RE CONSTANTLY VIGILANT, THAT WE'RE EMPOWERING OUR COMMUNITIES, AND INDEED, OUR POLICE SERVICES AND INTELLIGENCE SERVICES TO DO THE WORK NECESSARY TO KEEP CITIZENS SAFE. BUT THE FACT IS THAT FEAR DOESN'T MAKE US SAFER, FEAR MAKES US WEAKER. AND MAKING SURE THAT WE'RE BOTH CONFIDENT AND REASSURING IN HOW WE DEAL WITH OUR CITIZENS AND BUILD THEIR SECURITY INTO SOMETHING THAT IS EFFECTIVE WITHOUT LIMITING THE RIGHTS AND FREEDOMS THAT ARE CORE TO OUR OPEN SOCIETIES.

LI: SO, HOW DO YOU FEEL ABOUT THE RHETORIC COMING OUT OF THE REPUBLICAN RACE RIGHT NOW THAT HAS TRUMP SAYING HE WANTS TO BAN ALL MUSLIMS, CRUZ SAYING HE WANTS TO PATROLS MUSLIM NEIGHBORHOODS?

TRUDEAU: I THINK, YOU KNOW, WHAT MAKES AN OPEN AND FREE SOCIETY IS THE DEFENSE OF THE PRINCIPLES AND VALUES THAT LEAD US TO BE AN OPEN AND FREE SOCIETY. AND I THINK THAT IN TIMES OF ELECTIONS, THERE IS OFTEN POLARIZATION AROUND DISCOURSE, BUT I HAVE TREMENDOUS FAITH IN THE AMERICAN PEOPLE AND IN THE AMERICAN POLITICAL PROCESS.

LI: AND YOU'VE SAID BEFORE THAT YOU WILL WORK WITH WHOMEVER WINS THE WHITE HOUSE. BUT THIS SEEMS TO GO AGAINST ALL OF YOUR IDEOLOGY. SO, HOW DO YOU FIND COMMON GROUND?

TRUDEAU: YOU KNOW WHAT, THE COMMON GROUND BETWEEN OUR TWO COUNTRIES GO FAR BEYOND ANY INDIVIDUAL RELATIONSHIPS OR EVEN LEADERS. WE HAVE AN EXTRAORDINARY INTEGRATED ECONOMY, YOU KNOW, GOODS AND SERVICES AND INDIVIDUALS FLOW BACK AND FORTH ACROSS THE BORDER FOR WORK, FOR FAMILY REASONS ALL THE TIME. WE KNOW WE HAVE A GREAT RELATIONSHIP THAT IS, INDEED, A MODEL FOR THE WORLD, AND WE NEED TO CONTINUE TO WORK ON THAT, AND THAT WILL BE A PRIORITY FOR WHOEVER OCCUPIES THE WHITE HOUSE, LIKE IT IS FOR ANY CANADIAN PRIME MINISTER.

LI: WELL, THE U.S. AND CANADA ARE EACH OTHER'S LARGEST TRADING PARTNER, AND THAT ALSO GOES UNDER NAFTA, THE NORTH AMERICAN FREE TRADE ACT. HOW DO YOU FEEL ABOUT THE LEADING CONTENDERS ON BOTH THE REPUBLICAN SIDE AND THE DEMOCRATIC SIDE? THEY TALK ABOUT RENEGOTIATION OR EVEN CANCELING NAFTA.

TRUDEAU: THERE'S ALWAYS LITTLE SPIKES OF PROTECTIONISM AROUND ELECTION TIMES, AROUND VARIOUS RHETORIC. I THINK WE HAVE TO UNDERSTAND THAT TRADE IS ULTIMATELY GOOD, NOT JUST FOR OUR COUNTRIES BUT FOR OUR BUSINESSES AND FOR OUR WORKERS. WE KNOW THAT ENGAGING WITH THE WORLD IN A CONSTRUCTIVE, POSITIVE WAY LEADS TO GOOD JOBS AND GOOD GROWTH. WE JUST HAVE TO MAKE SURE THAT WE'RE CONSTANTLY, YOU KNOW, LOOKING FOR THE BEST – LOOKING OUT FOR THE BEST INTERESTS OF OUR PEOPLE AND OUR ECONOMIES.

LI: BUT PRIME MINISTER, SURELY, YOU MUST BE PREPARING YOURSELF TO TRY TO – OR HAVING TO ENGAGE IN RENEGOTIATIONS IN 2017.

TRUDEAU: I DON'T THINK THAT'S A REAL ISSUE.

LI: THAT'S NOT A REAL ISSUE?

TRUDEAU: I MEAN, I THINK IT'S A CONCERN, BUT I'M NOT WORRIED THAT WE'RE GOING TO SUDDENLY REOPEN NAFTA OR OTHER TRADE DEALS. THE CHALLENGE IS, ONCE YOU REOPEN IT A LITTLE BIT, THEY ALL TEND TO UNRAVEL, AND IT'S TOO IMPORTANT FOR BOTH OF OUR ECONOMIES TO CONTINUE TO HAVE A STRONG TRADING RELATIONSHIP.

LI: YEAH. WHAT ABOUT THE TPP, THE TRANS-PACIFIC PARTNERSHIP? THAT WAS A MAIN PIVOT TO ASIA FROM THE OBAMA ADMINISTRATION. YOU KNOW, THERE ARE A LOT OF CONTENDERS AGAINST IT AT THIS POINT. HOW DO YOU FEEL ABOUT TPP GOING FORWARD?

TRUDEAU: TRADE IS GOOD. TRADE IS IMPORTANT, AS I SAID. IT LEADS TO GROWTH, IT LEADS TO JOBS. THE CHALLENGE IS ALWAYS THAT WHENEVER THERE IS A NEW DEAL, THERE ARE GOING TO BE PEOPLE WHO HAVE CONCERNS, THERE ARE PEOPLE WHO ARE SOLIDLY BEHIND IT. WE'VE COMMITTED TO ENGAGE WITH CANADIANS, WITH VARIOUS SECTORS AND INDUSTRIES TO MAKE SURE THAT WE'RE MAXIMIZING THE BENEFITS FOR THE LONG TERM AND DRAWING THE RIGHT KIND OF SUPPORT FROM CANADIANS.

LI: BUT WHETHER OR NOT IT'S GOING TO BE A REALITY IS A WHOLE DIFFERENT STORY AT THIS POINT.

TRUDEAU: WELL, YOU KNOW WHAT, YOU HAVE TO HAVE FAITH IN THE FACT THAT WE'RE MOVING FORWARD IN A RESPONSIBLE WAY TO ENGAGE WITH THE WORLD IN THE CONSTRUCTIVE, PRODUCTIVE WAYS THAT CANADIANS ALWAYS HAVE. AND I'VE COMMITTED TO MAKING A CASE FOR TRADE IN GENERAL TO CANADIANS, AND WE'RE GOING THROUGH THE IMPORTANT STEPS OF CONSULTING AND GETTING PEOPLE ON BOARD AS WE MOVE FORWARD.

LI: YEAH. SPEAKING OF ENGAGEMENT, LET'S TALK ABOUT THE REST OF THE WORLD. AND CHINA, IN PARTICULAR, BECAUSE THERE'S A SLOWDOWN TAKING PLACE IN CHINA. JUST THIS MORNING, S&P DOWNGRADED THEIR OUTLOOK ON CHINA LONG TERM. YOU KNOW, CHINESE MONEY HAS FLOWED INTO CANADIAN BORDERS. EVERY THIRD HOME IN VANCOUVER HAS BEEN BOUGHT UP BY CHINESE MONEY. YOU KNOW, WHAT HAPPENS IF THE MONEY DRIES UP? WHAT HAPPENS TO THE CANADIAN ECONOMY?

TRUDEAU: WE ARE, AS IS EVERY COUNTRY NOW, CONNECTED TO THE GLOBAL ECONOMY AND HOW WE MAXIMIZE OUR ENGAGEMENT BY – FOR EXAMPLE, MOVING FORWARD WITH THE CANADA/EUROPE TRADE DEAL THAT WE'VE JUST SIGNED – HOW WE MOVE FORWARD WITH GREATER ENGAGEMENTS AROUND THE GLOBAL ECONOMY IS GOING TO BE REALLY IMPORTANT. SO, YES, AS VARIOUS AREAS FACE CHALLENGES, OTHERS CREATE OPPORTUNITIES. AND WE NEED TO BE RESILIENT AND DIVERSIFIED IN HOW WE ENGAGE. AND CANADA, QUITE FRANKLY, WITH ITS DIVERSITY, WITH ITS GEOGRAPHICAL STRENGTH, WITH ITS HUMAN RESOURCE AND NATURAL RESOURCES, WE'RE WELL POSITIONED TO GROW IN THE COMING YEARS.

LI: BUT PRIME MINISTER, THE CANADIAN ECONOMY, OF COURSE, HAS BEEN STRUGGLING. LAST YEAR GOING THROUGH A RECESSION. AND THIS YEAR, SOME SAY THERE'S A 35% CHANCE OF A DOUBLE DIP. HOW CONCERNED ARE YOU, ESPECIALLY WITH OIL PRICES DOWN 70%?

TRUDEAU: OBVIOUSLY, WELL, OIL PRICES ARE A BIG FACTOR IN HOW I THINK THE CANADIAN ECONOMY HAS RESPONDED, AND THAT'S WHY WE'VE PUT SO MUCH OF AN EMPHASIS IN OUR RECENT BUDGET IN INVESTMENT, IN GROWING OUR ECONOMY BY CREATING GOOD, LONG-TERM, STABLE INFRASTRUCTURE, WHETHER IT'S PUBLIC TRANSIT OR GREEN INVESTMENTS. WHETHER WE'RE LOOKING AT SUPPORTING THE MIDDLE CLASS DIRECTLY OR JUST CREATING GROWTH THAT'S GOING TO WORK FOR EVERYONE. THAT DIVERSITY THAT WE HAVE AS CORE TO CANADA NEEDS TO BE MORE THAN JUST NATURAL RESOURCES, BUT ALL THE DIFFERENT PERSPECTIVES AND VIEWS WE HAVE, AND I'M VERY EXCITED ABOUT HOW CANADA IS POSITIONING ITSELF IN THE COMING YEARS.

LI: BUT I THINK YOUR GOVERNMENT ALSO RECOGNIZES THAT CANADA NEEDS A HELPING HAND. ENHANCING YOUR RECENT BUDGET, THE FIRST ONE UNDER YOUR ADMINISTRATION, YOU KNOW, YOU ARE FORECASTING – YOU ARE SPENDING MORE BASICALLY THAN ANY OTHER ADMINISTRATION SINCE THE GLOBAL FINANCIAL CRISIS. IS THAT FRUGAL IN THESE TIMES?

TRUDEAU: I THINK IT'S RESPONSIBLE. ONE OF THE BIG CHALLENGES WE'RE FACING RIGHT NOW AROUND THE WORLD IS LOWER GROWTH RATES THAN WE NEED. AND WHERE WE'RE POSITIONING OURSELVES IS ON THE INVESTMENT SIDE OF THE INVESTMENT VERSUS AUSTERITY DEBATE. WE BELIEVE THAT CONFIDENT, OPTIMISTIC COUNTRIES SHOULD BE INVESTING IN THEIR FUTURE, AND THAT'S EXACTLY WHAT WE'RE DOING. WE HAVE AN EXTREMELY GOOD FISCAL POSITIONING, THE LOWEST DEBT-TO-GDP RATIO OF ANY COUNTRY IN THE G-7. WE HAVE LOW INTEREST RATES, AS EVERYONE DOES. SO, THIS IS A TIME TO BE INVESTING IN THE KINDS OF SOLUTIONS AND THE KINDS OF GROWTH THAT WE'RE GOING TO NEED IN THE COMING YEARS.

LI: YEAH, AND PEOPLE ARE TALKING ABOUT THE CANADIAN CURRENCY, WHICH IS A MUCH-TRADED CURRENCY GLOBALLY. AND IT HIT A 13-YEAR LOW THIS YEAR. I KNOW YOU HAVE COME UP WITH COMMENTS RECENTLY TALKING ABOUT THE COMFORTABLE LEVEL OF THE LOONEY, THE CANADIAN DOLLAR. DOES THAT MEAN THAT YOU PREFER A WEAKER CURRENCY FOR CANADA?

TRUDEAU: THE FACT IS IT'S IMPORTANT THAT MONETARY POLICY BE DETACHED FROM POLITICIANS, AND THAT'S WELL ENSCONCED IN CANADA. BUT THERE'S NO QUESTION THAT WHEN THE DOLLAR'S LOWER, THERE ARE CERTAIN INDUSTRIES THAT DO BETTER. WHEN THE DOLLAR IS HIGHER, OTHER INDUSTRIES DO BETTER. WHAT MATTERS IN A MODERN ECONOMY IS THAT WE HAVE THE RESILIENCE TO BE ABLE TO ADAPT TO WHATEVER LEVEL THE DOLLAR IS AT.

LI: YEAH, BUT TO ALSO COME OUT AS PRIME MINISTER AND ALSO YOUR FINANCE MINISTER TO TALK DOWN THE DOLLAR, THAT'S SOMETHING THAT IS TRADITIONALLY NOT DONE IN CANADA.

TRUDEAU: I DON'T THINK I'M TALKING DOWN THE DOLLAR. I'M RECOGNIZING THE REALITY AND WHERE WE NEED TO BE RESPONDING TO CHALLENGES AND OPPORTUNITIES THAT COME WITH FLUCTUATING MONETARY MARKETS.

LI: OKAY. AND I ALSO WANT TO TALK TO YOU ABOUT WHAT'S HAPPENING, YOU KNOW, FOR INSTANCE, ELSEWHERE IN THE WORLD. AND JUST HOW DO YOU BROADEN RELATIONSHIP – IN THE U.S. GOING FORWARD? YOU KNOW, JUST TO TAKE IT BACK TO POLITICS, BECAUSE EVERYONE'S TALKING ABOUT THIS HERE AT THE U.S. CHAMBER EVENT AS WELL, YOU KNOW, HOW DO YOU FEEL WHEN YOU HEAR SOME OF THE COMMENTS AND QUOTES COMING FROM, SAY THE FRONT-RUNNER FOR THE REPUBLICAN NOMINATION, DONALD TRUMP?

TRUDEAU: WELL, I THINK ONE OF THE THINGS THAT WE'RE SEEING, AND WE'VE SEEN IT AROUND THE WORLD, IS A LEVEL OF FRUSTRATION BY CITIZENS AT POLITICIANS IN THE POLITICAL PROCESS. AND I THINK WE'RE SEEING VARIOUS ARTICULATIONS OF THAT ON THE LEFT AND ON THE RIGHT HERE IN THE UNITED STATES. BUT I ALSO HAVE TREMENDOUS CONFIDENCE IN THE AMERICAN PEOPLE AND IN THEIR CAPACITY TO MOVE FORWARD IN A POSITIVE WAY. AND I LOOK FORWARD TO WORKING WITH WHOMEVER THEY CHOOSE TO ELECT IN NOVEMBER.

LI: WHOMEVER. JUST FINAL QUESTION FOR YOU. AND THIS HAS TO DO WITH SPORTS AND SOME WOULD SAY THE NATIONAL PAST TIME IN CANADA, HOCKEY. THIS IS THE FIRST TIME SINCE 1970 THAT NO CANADIAN NHL TEAM HAS MADE THE PLAYOFFS. WHAT ARE YOU GOING TO DO ABOUT THAT?

TRUDEAU: OBVIOUSLY, A DIFFICULT CHALLENGE, BUT AS WE'VE SEEN, THERE ARE GOOD YEARS AND BAD YEARS, AND YOU KNOW, MY BELOVED MONTREAL CANADIENS ARE GOING THROUGH A BIT OF A TOUGH YEAR, BUT I KNOW WE'RE GOING TO BOUNCE BACK.

LI: ALL RIGHT. PRIME MINISTER, THANK YOU SO MUCH FOR SHARING YOUR TIME AND ENJOY YOUR TRIP TO WASHINGTON, D.C.

TRUDEAU: APPRECIATE IT VERY MUCH.

LI: THAT IS THE VERY HONORABLE CANADIAN PRIME MINISTER JUSTIN TRUDEAU. BACK TO YOU, SIMON.

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