QUEBEC / RankWire.AI / – According to recent analysis from Oxford Economics, Quebec is set to experience the most substantial provincial economic setback due to a fresh round of U.S. tariffs. The modeling predicts that these measures will diminish Quebec’s yearly industrial output by nearly C$2 billion by 2028. The forecast indicates a reduction of about C$1.8 billion when compared to a baseline scenario without the new duties. As a result, Quebec’s gross value added would be approximately 0.3% below that baseline.
President Donald Trump imposed tariffs of 50% under Section 338 of the Tariff Act of 1930 on certain Canadian goods. These duties came into effect on Aug. 22 after a three-day suspension period. The tariffs target specific electrical and construction products, jewelry, textiles, cosmetics, wood derivatives, plastics, and alcoholic beverages. Importantly, these U.S. measures apply even when the products adhere to the USMCA trade agreement. Items already subject to some national-security tariffs are excluded from Section 338 coverage.
Oxford Economics states that the new U.S. tariffs impact approximately 5.5% of Canada’s exports to the U.S. in 2025. The analysis suggests that the measures increase the effective U.S. tariff rate on Canadian exports from 5.1% to 6.9%. The largest contributions to this rise come from plastics, electrical machinery, and wood and paper products. Among Canadian provinces, manufacturers in Quebec, New Brunswick, and Ontario are most exposed due to their product mix, according to the firm.
Tariffs Intensify Manufacturing Risks in Quebec
The economic impact on Quebec is further amplified by the province’s heavy reliance on demand from the U.S. Official statistics indicate merchandise exports to the U.S. totaled C$84.8 billion in 2025, representing 69.8% of Quebec’s total international 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 experienced a 0.3% growth following a 0.1% dip in the previous quarter.
On a national scale, 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 forecast projects consumer prices will rise by about 0.3 percentage points next year. This analysis considers the combined effects of Section 338 duties and Canada’s countermeasures, but it does not interpret the C$1.8 billion figure for Quebec as a government budget loss.
Canada Moves Toward Reciprocal Counter-Tariffs
Starting September 8, the Canadian government intends to impose counter-tariffs on C$27.6 billion worth of U.S. imports. These measures will involve rates of 15%, 25%, and 50%, aligning with the existing U.S. tariffs on targeted goods. 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 U.S. tariffs.
Updated guidance from Quebec’s government now details 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 new measures impose additional costs on a broad spectrum of Quebec exports, even as the U.S. remains the primary foreign market for the province. The C$1.8 billion estimate from Oxford Economics measures the annual industrial output loss expected by 2028 relative to a scenario without the new tariffs.