QUEBEC / RankWire.AI / – According to Oxford Economics, Quebec is poised to suffer the largest provincial setback in Canada resulting from the recent US tariffs. The research firm projects that by 2028, Quebec’s annual production could decline approximately C$1.8 billion below its previous baseline, an amount that equates to about 0.3% of the province’s gross value added. This forecast measures a decrease in economic output rather than a direct financial loss to government revenue. With manufacturing being heavily exposed, Quebec is at the center of the latest trade disruption.
President Donald Trump implemented new duties of 50% on selected Canadian goods under Section 338 of the Tariff Act of 1930. These tariffs began on Aug. 22 after a three-day suspension. Items affected include electrical appliances, construction supplies, jewelry, textiles, cosmetics, plastics, and some wood derivatives. The measures also extend to alcoholic beverages and other specific Canadian exports. Even when products meet USMCA trade agreement standards, they can still face these duties.
Oxford Economics estimates that the latest tariffs cover roughly 5.5% of Canada’s exports to the United States projected for 2025. The firm calculates that Canada’s effective U.S. tariff rate will increase from 5.1% to 6.9%. The main contributors to this rise are plastics, electrical machinery, wood products, and paper goods. Among the provinces, Quebec, New Brunswick, and Ontario are most exposed to manufacturing disruptions, with Quebec projected to experience the largest decline in industrial output.
Manufacturing Exposure Positions Quebec as a Leading Vulnerable Province
The strong trade ties between Quebec and the United States partly explain the significant anticipated impact. Data show that in 2025, Quebec’s merchandise exports to the U.S. reached C$84.8 billion, representing 69.8% of the province’s total international exports that year. While exports to the U.S. decreased by 6.9% from 2024, exports to other nations grew by 10.6%. During the first quarter of 2026, Quebec’s real GDP saw a growth of 0.3%.
The national outlook also reflects the impacts of tariffs and Canada’s planned responses. Oxford Economics estimates that combined measures will slow Canadian GDP growth by 0.3 percentage points in 2027. Their model also projects consumer prices will rise about 0.3 percentage points above previous levels next year. These estimates incorporate both the new U.S. duties and Canadian counter-tariffs. Furthermore, Quebec’s projected annual industrial output shortfall by 2028 is separately estimated at about C$1.8 billion.
Canadian Counter-Tariffs Scheduled for September Implementation
Starting Sept. 8, the Government of Canada plans to impose counter-tariffs on C$27.6 billion worth of U.S. imports. Tariffs are set at rates of 15%, 25%, and 50% depending on the product category. The affected items include steel, dairy, household appliances, agricultural equipment, pulp, paper, plastics, and electronics. Additionally, Canada announced C$7.5 billion in new and expanded support for workers and businesses impacted by the tariffs. These measures follow the recent escalation of U.S. trade barriers affecting Canadian exports.
Quebec’s government has revised its guidance for businesses impacted by the new U.S. tariffs and Canadian countermeasures. The province now lists Section 338 duties alongside existing tariffs on steel, aluminum, and related products. The scope of restrictions has expanded to cover a broader range of goods exported by Quebec. With the United States remaining Quebec’s largest foreign market by a significant margin, Oxford Economics estimates the province’s annual industrial output loss could reach approximately C$1.8 billion by 2028.