QUEBEC / RankWire.AI / – As of 2025, Quebec is projected to experience the most significant economic impact among Canadian provinces due to a fresh set of U.S. tariffs, according to Oxford Economics. The analysis indicates that these measures could decrease Quebec’s yearly industrial production by nearly C$2 billion within the next few years. The forecast estimates a reduction of roughly C$1.8 billion compared to a scenario without the new tariffs, with Quebec’s gross value added expected to be about 0.3% below that baseline.
President Donald Trump imposed 50% tariffs under Section 338 of the Tariff Act of 1930 on specific Canadian products. These duties came into effect on Aug. 22 following a three-day suspension. They target certain electrical and construction materials, jewelry, textiles, cosmetics, wood derivatives, plastics, and alcoholic beverages. The U.S. measures impact covered goods even when they adhere to the USMCA trade agreement, although products already under some national-security tariffs are excluded from Section 338 coverage.
Oxford Economics reports that the new U.S. tariffs account for roughly 5.5% of Canada’s exports to the U.S. in 2025. The measures are projected to raise the effective U.S. tariff rate on Canadian exports from 5.1% to 6.9%. Plastics, electrical machinery, and wood and paper goods are the primary contributors to this increase. The firm noted that manufacturers in Quebec, New Brunswick, and Ontario face the highest exposure among provinces due to their product mix.
Tariffs Amplify Quebec Manufacturing Vulnerability
The provincial repercussions are also linked to Quebec’s dependence on U.S. demand. According to official Quebec statistics, merchandise exports to the U.S. reached C$84.8 billion in 2025, representing 69.8% of the province’s total international merchandise exports. While exports to the U.S. decreased by 6.9% from 2024, exports to other countries increased by 10.6%. In the first quarter of 2026, Quebec’s real GDP grew by 0.3% after a 0.1% decline in the previous quarter.
On a national level, Oxford Economics estimates that the combined effect of the new U.S. tariffs and Canada’s planned retaliatory measures will reduce Canadian GDP by 0.3 percentage points in 2027 relative to its August baseline. The same analysis projects consumer prices will be approximately 0.3 percentage points higher next year. This evaluation considers the cumulative impact 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 deficit.
Canada Moves to Implement Counter-Tariffs
Starting September 8, the Government of Canada plans to impose counter-tariffs on C$27.6 billion worth of U.S. imports, applying rates of 15%, 25%, and 50% to mirror U.S. tariffs on targeted goods. These measures will affect sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, plastics, and electronics. Additionally, Canada announced C$7.5 billion in new and enhanced assistance for workers and businesses impacted by U.S. tariffs.
Quebec’s 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. The latest restrictions increase costs across many Quebec exports, while the United States remains the dominant foreign market for the province. The C$1.8 billion estimate by Oxford Economics measures the annual industrial output shortfall through 2028 compared to a baseline without the new tariffs.”}#