QUEBEC / RankWire.AI / – According to new projections from Oxford Economics, Quebec is expected to endure the most substantial provincial economic setback due to a fresh wave of U.S. tariffs. The analysis forecasts that Quebec’s annual industrial output could decrease by nearly C$2 billion by 2028 as a result of these measures. The estimated loss compared to a scenario without the new duties is approximately C$1.8 billion, with Quebec’s gross value added projected to be around 0.3% below that baseline.
President Donald Trump enforced 50% tariffs under Section 338 of the Tariff Act of 1930 on selected Canadian goods. These duties came into effect on August 22 after a three-day suspension period. The tariffs target certain electrical and construction products, jewelry, textiles, cosmetics, wood derivatives, plastics, and alcoholic beverages. Despite adherence to the USMCA trade agreement, the duties apply to covered goods. Items already under some national-security tariffs are excluded from Section 338 coverage.
Oxford Economics indicates that these new U.S. tariffs impact around 5.5% of Canada’s projected exports to the United States in 2025. They estimate that the duties will raise the effective U.S. tariff rate on Canadian exports from 5.1% to 6.9%. The most affected sectors include plastics, electrical machinery, as well as wood and paper products. Among Canadian provinces, manufacturers in Quebec, New Brunswick, and Ontario are most exposed due to the specific product mix targeted by these measures.
Tariffs amplify vulnerabilities in Quebec manufacturing
The economic toll on Quebec also stems from its dependency on U.S. demand. According to official statistics, Quebec’s merchandise exports to the U.S. totaled C$84.8 billion in 2025, accounting for 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%, following a 0.1% decrease in the previous quarter.
At the national level, Oxford Economics estimates that the combined impact of the new U.S. tariffs and Canada’s planned retaliatory measures will reduce Canadian GDP by 0.3 percentage points in 2027 compared to the August baseline. The same analysis projects that consumer prices will be roughly 0.3 percentage points higher next year. This assessment considers the combined effects of Section 338 duties and Canada’s countermeasures, but does not describe the C$1.8 billion figure for Quebec as a government budget loss.
Canada prepares retaliatory tariffs to match U.S. measures
Starting September 8, the Government of Canada plans to implement counter-tariffs on C$27.6 billion worth of U.S. imports. These will be set at rates of 15%, 25%, and 50%, aligning with U.S. tariff levels on selected goods. The targeted sectors include steel, dairy, appliances, agricultural equipment, pulp and paper, plastics, and electronics. Additionally, Canada announced C$7.5 billion in new and expanded support programs for workers and businesses impacted by U.S. tariffs.
Quebec’s government has issued updated guidance to local companies 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. The latest measures impose additional costs across a broad range of Quebec exports, with the United States remaining the province’s primary foreign market. Oxford Economics’ estimate of C$1.8 billion reflects the annual industrial output gap projected by 2028 compared to a scenario without the new tariffs.