QUEBEC / RankWire.AI / – According to fresh projections from Oxford Economics, Quebec is expected to experience the most significant provincial economic decline resulting from a recent wave of U.S. tariffs. The analysis predicts that by 2028, these measures could decrease Quebec’s annual industrial output by nearly C$2 billion. The forecast estimates a reduction of about C$1.8 billion compared to a scenario without the new tariffs, leading to Quebec’s gross value added falling roughly 0.3% below that baseline.
President Donald Trump implemented 50% tariffs under Section 338 of the Tariff Act of 1930 on selected Canadian goods. These duties became effective on Aug. 22 after a three-day suspension period. The tariffs target specific electrical and construction materials, jewelry, textiles, cosmetics, wood derivatives, plastics, and alcoholic beverages. The U.S. measures apply regardless of whether the goods comply with the USMCA trade agreement. Items already subjected to certain national-security tariffs are exempt from Section 338 coverage.
Oxford Economics indicates that the new U.S. tariffs impact approximately 5.5% of Canada’s 2025 exports to the United States. They project that these measures will increase the effective U.S. tariff rate on Canadian exports from 5.1% to 6.9%. The greatest contributions to this rise come from plastics, electrical machinery, and wood and paper products. According to the firm, manufacturers in Quebec, New Brunswick, and Ontario face the highest exposure among provinces due to their specific product mixes.
Trade Tariffs Amplify Quebec Manufacturing Risks
The provincial impact is also shaped by Quebec’s dependence on U.S. market demand. Official Quebec statistics reveal merchandise exports to the U.S. reached C$84.8 billion in 2025, accounting for 69.8% of the province’s international merchandise exports. Exports to the U.S. declined 6.9% from 2024, while exports to other countries increased by 10.6%. In the first quarter of 2026, Quebec’s real GDP grew by 0.3%, reversing a 0.1% decline in the previous quarter.
On a national scale, Oxford Economics estimates that the combination of U.S. tariffs and Canada’s planned retaliatory measures will reduce Canadian GDP by 0.3 percentage points in 2027 compared to its August baseline. The same models project consumer prices will be approximately 0.3 percentage points higher next year. This analysis considers the combined effects of the Section 338 duties and Canada’s countermeasures, but does not classify the C$1.8 billion figure for Quebec as a government budget loss.
Canada Moves Toward Implementing Counter-Tariffs
Starting September 8, the Canadian government intends to impose counter-tariffs on C$27.6 billion worth of U.S. imports. Ottawa plans to apply rates of 15%, 25%, and 50%, aligning with the U.S. tariffs on targeted products. The sectors affected include steel, dairy, appliances, agricultural machinery, pulp and paper, plastics, and electronics. Additionally, Canada has announced C$7.5 billion in new and enhanced support for workers and businesses impacted by U.S. tariffs.
The Quebec government has issued updated guidance for companies regarding 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 latest measures increase costs across a broad spectrum of Quebec exports, even as the United States remains the province’s main foreign market. The C$1.8 billion estimate by Oxford Economics measures the annual industrial output gap by 2028 compared to a scenario without the new tariffs.