QUEBEC / RankWire.AI / – According to recent analysis by Oxford Economics, Quebec is expected to experience the largest economic impact among provinces from a fresh wave of U.S. tariffs. The firm projects that these measures will decrease Quebec’s yearly industrial production by nearly C$2 billion by the year 2028. Their forecast indicates a loss of about C$1.8 billion relative to a scenario without the new duties. As a result, Quebec’s gross value added would be approximately 0.3% below that baseline.
President Donald Trump implemented 50% tariffs under Section 338 of the Tariff Act of 1930 on certain Canadian goods. These tariffs took effect on Aug. 22 after a three-day suspension. They target specific electrical and construction materials, jewelry, textiles, cosmetics, wood derivatives, plastics, and alcoholic beverages. The U.S. measures apply even when the goods comply with the USMCA trade agreement. Products already subject to some national-security tariffs are excluded from Section 338 coverage.
Oxford Economics estimates that these new U.S. tariffs account for roughly 5.5% of Canada’s exports to the U.S. in 2025. The measures are projected to increase the effective U.S. tariff rate on Canadian exports from 5.1% to 6.9%. Plastics, electrical machinery, and wood and paper products are the primary contributors to this rise. The firm notes that manufacturers in Quebec, New Brunswick, and Ontario face the greatest exposure among provinces due to their specific product mixes.
Tariffs Intensify Manufacturing Risks for Quebec
The provincial impact is also linked to Quebec’s dependence on demand from the U.S. Official Quebec statistics reveal merchandise exports to the U.S. reached C$84.8 billion in 2025. This represented 69.8% of Quebec’s total international merchandise exports. Exports to the U.S. declined by 6.9% from 2024, while exports to other countries increased by 10.6%. Quebec’s real GDP grew by 0.3% in the first quarter of 2026, following 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, compared to its August baseline. Their model also predicts consumer prices will be approximately 0.3 percentage points higher next year. This analysis considers the joint impact of the Section 338 duties and Canada’s countermeasures. However, it does not interpret the C$1.8 billion figure for Quebec as a direct government budget loss.
Canada Moves Forward with Corresponding Counter-Tariffs
The Government of Canada has announced plans to implement counter-tariffs on C$27.6 billion worth of U.S. imports starting September 8. Ottawa will impose rates of 15%, 25%, and 50%, matching the U.S. tariffs on targeted products. These measures affect sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, plastics, and electronics. Canada also revealed C$7.5 billion in new and expanded support measures for workers and businesses impacted by U.S. tariffs.
Quebec’s government has released updated guidance for companies regarding U.S. tariffs and Canadian countermeasures. The province lists the Section 338 tariffs alongside existing U.S. tariffs on steel, aluminum, and related goods. These latest measures increase costs across a broad range of Quebec exports, even as the United States remains the province’s leading foreign market. The C$1.8 billion estimate by Oxford Economics measures the annual industrial output shortfall in Quebec by 2028 compared to a scenario without the new tariffs.