QUEBEC / RankWire.AI / – According to recent forecasts from Oxford Economics, Quebec is expected to face the most significant economic impact among provinces due to a fresh wave of U.S. tariffs. The analysis projects that these measures will decrease Quebec’s annual industrial output by nearly C$2 billion by 2028, with an estimated loss of about C$1.8 billion compared to a scenario without the new duties. This would result in Quebec’s gross value added being approximately 0.3% below that baseline.
President Donald Trump imposed a 50% tariff under Section 338 of the Tariff Act of 1930 on specific Canadian products. The tariffs, which took effect on Aug. 22 after a three-day suspension, target electrical and construction goods, jewelry, textiles, cosmetics, wood derivatives, plastics, and alcoholic beverages. These duties apply even to products that meet the USMCA trade agreement, while certain items already subject to national-security tariffs are excluded from Section 338 coverage.
Oxford Economics indicated that the new U.S. tariffs impact roughly 5.5% of Canada’s exports to the United States in 2025. Their analysis estimates that the measures will elevate the effective U.S. tariff rate on Canadian exports from 5.1% to 6.9%. The primary contributors to this increase include plastics, electrical machinery, and wood and paper products. The firm further notes that Quebec, New Brunswick, and Ontario manufacturers face the highest exposure among Canadian provinces, given their particular product mixes.
Tariffs intensify manufacturing vulnerabilities in Quebec
The provincial impact stems partly from Quebec’s dependence on U.S. demand. Official statistics reveal that Quebec’s merchandise exports to the U.S. amounted to C$84.8 billion in 2025, representing 69.8% of its total international merchandise exports. While exports to the U.S. declined by 6.9% from 2024, exports to other nations increased by 10.6%. In the first quarter of 2026, Quebec’s real GDP grew by 0.3% after experiencing a 0.1% contraction in the previous quarter.
On a national scale, Oxford Economics estimates that the combined effect of the new U.S. tariffs and Canada’s planned retaliation will reduce Canadian GDP by 0.3 percentage points in 2027 from its August baseline. Their projections also suggest consumer prices could rise by approximately 0.3 percentage points next year. The analysis considers the overall impact of the Section 338 duties alongside Canadian countermeasures, but does not label the C$1.8 billion figure for Quebec as a government budget deficit.
Canada is set to implement counter-tariffs in response
Starting September 8, the Canadian government plans to introduce counter-tariffs on C$27.6 billion worth of U.S. imports. These measures will align with U.S. tariff rates of 15%, 25%, and 50% on targeted products. The sectors affected include steel, dairy, appliances, agricultural machinery, pulp and paper, plastics, and electronics. Additionally, Canada announced C$7.5 billion in new and expanded support for workers and businesses impacted by the U.S. tariffs.
Updated guidance has been issued by Quebec’s government for local businesses regarding the U.S. duties and Canadian countermeasures. The province lists the Section 338 tariffs alongside existing U.S. tariffs on steel, aluminum, and related products. These recent measures increase costs across a broad range of Quebec exports, with the United States remaining the province’s primary foreign market. The Oxford Economics estimate of C$1.8 billion reflects the annual industrial output gap projected by 2028 relative to a baseline absent the new tariffs.