QUEBEC / RankWire.AI / – In Quebec, the impact of the latest U.S. tariffs is projected to be the most significant among Canadian provinces, according to Oxford Economics. The firm’s analysis indicates that by 2028, Quebec’s annual economic output could decline by approximately C$1.8 billion relative to its previous baseline, representing about 0.3% of the province’s gross value added. This forecast reflects losses in economic activity rather than direct fiscal deficits. With its manufacturing sector heavily exposed, Quebec finds itself at the heart of the recent trade disturbances.
President Donald Trump enacted new 50% tariffs on select Canadian goods under Section 338 of the Tariff Act of 1930. These tariffs came into effect on August 22, after a three-day pause. The targeted products encompass electrical equipment, construction materials, jewelry, textiles, cosmetics, plastics, and some wood-based items. Additionally, alcoholic beverages and other specific Canadian exports are subject to these duties. Even if products qualify under the USMCA trade agreement, they may still face these tariffs.
Oxford Economics estimates that these measures now impact approximately 5.5% of Canada’s exports to the U.S. in 2025. The organization’s calculations suggest that Canada’s effective tariff rate to the U.S. rises from 5.1% to 6.9%. The increase largely stems from plastics, electrical machinery, wood products, and paper goods. Among the provinces, Quebec, New Brunswick, and Ontario exhibit the highest manufacturing exposure, with Quebec expected to experience the largest decline in industrial output.
Manufacturing Exposure Positions Quebec as a Leading Vulnerable Region
Quebec’s extensive trade connections with the U.S. help explain the magnitude of the anticipated effects. Data show that merchandise exports from Quebec to the U.S. reached C$84.8 billion in 2025, accounting for 69.8% of the province’s total merchandise exports that year. While exports to the U.S. decreased by 6.9% from 2024, exports to other nations increased by 10.6%. During the first quarter of 2026, Quebec’s real GDP grew by 0.3%.
The national outlook also incorporates the impact of tariffs and Canada’s planned responses. According to Oxford Economics, the combined effects of the measures are projected to reduce Canadian GDP growth by 0.3 percentage points in 2027. It also predicts that consumer prices will be approximately 0.3 percentage points higher than the previous baseline next year. These estimates consider both the new U.S. duties and the counter-tariffs introduced by Canada. Furthermore, the analysis separately projects the annual industrial output shortfall for Quebec at about C$1.8 billion by 2028.
Canada Plans to Implement Countermeasures in September
Starting September 8, the Canadian government intends to impose counter-tariffs on C$27.6 billion worth of U.S. imports. Ottawa has set tariffs of 15%, 25%, and 50% on various product categories. These include steel, dairy products, household appliances, agricultural machinery, pulp, paper, plastics, and electronics. Alongside the tariffs, Canada announced C$7.5 billion in additional support for workers and businesses affected by the tariffs and countermeasures. These actions follow the recent escalation of U.S. trade barriers on Canadian goods.
Quebec’s government has updated its guidance for local businesses impacted by the new U.S. tariffs and Canada’s retaliatory measures. The province now lists Section 338 duties alongside existing tariffs on steel, aluminum, and related products. The scope of restrictions has broadened, affecting a wider range of goods exported from Quebec. Given that the U.S. remains Quebec’s largest trading partner by a significant margin, Oxford Economics estimates the province’s annual industrial output loss could reach about C$1.8 billion by 2028.