QUEBEC / RankWire.AI / – Quebec faces the largest provincial economic hit from a fresh round of U.S. tariffs, according to new modelling from Oxford Economics. The firm estimates the measures will reduce Quebec’s annual industrial output by nearly C$2 billion by 2028. Its forecast puts the loss at about C$1.8 billion compared with a baseline without the new duties. Quebec’s gross value added would stand about 0.3% below that baseline.
President Donald Trump imposed 50% tariffs under Section 338 of the Tariff Act of 1930 on selected Canadian goods. The duties took effect Aug. 22 after a three-day suspension. They cover certain electrical and construction goods, jewelry, textiles, cosmetics, wood derivatives, plastics and alcoholic beverages. The U.S. measures apply to covered goods even when they comply with the USMCA trade agreement. Products already subject to some national-security tariffs remain outside Section 338 coverage.
Oxford Economics said the new U.S. tariffs cover around 5.5% of Canada’s 2025 exports to the United States. It estimates the measures raise the effective U.S. tariff rate on Canadian exports from 5.1% to 6.9%. Plastics, electrical machinery, and wood and paper products contribute most to that increase. The firm said manufacturers in Quebec, New Brunswick and Ontario face the greatest exposure among provinces because of the targeted product mix.
Tariffs deepen Quebec manufacturing exposure
The provincial impact also reflects Quebec’s reliance on U.S. demand. Official Quebec statistics show merchandise exports to the United States totaled C$84.8 billion in 2025. That represented 69.8% of Quebec’s international merchandise exports. Exports to the U.S. fell 6.9% from 2024, while exports to other countries rose 10.6%. Quebec’s real GDP grew 0.3% in the first quarter of 2026 after slipping 0.1% in the previous quarter.
At the national level, Oxford Economics estimates the new U.S. tariffs and Canada’s planned retaliation will trim Canadian GDP by 0.3 percentage points in 2027 from its August baseline. The same modelling projects consumer prices about 0.3 percentage points higher next year. The analysis measures the combined effect of the Section 338 duties and Canada’s countermeasures. It does not describe the C$1.8 billion Quebec figure as a government budget loss.
Canada prepares matching counter-tariffs
The Government of Canada plans counter-tariffs on C$27.6 billion of U.S. imports from Sept. 8. Ottawa will apply rates of 15%, 25% and 50%, matching corresponding U.S. tariff rates on targeted products. The measures cover sectors including steel, dairy, appliances, agricultural equipment, pulp and paper, plastics and electronics. Canada also announced C$7.5 billion in new and enhanced support for workers and businesses affected by U.S. tariffs.
Quebec’s government has published updated guidance for companies on 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 add costs across a wide range of Quebec exports while the United States remains the province’s dominant foreign market. Oxford Economics’ C$1.8 billion estimate measures the annual industrial output gap by 2028 against a baseline without the new tariffs.