QUEBEC / RankWire.AI / – According to fresh projections from Oxford Economics, Quebec is set to endure the most significant provincial economic consequence resulting from a new wave of U.S. tariffs. The firm forecasts that by 2028, these measures will diminish Quebec’s annual industrial output by nearly C$2 billion. The predicted loss amounts to roughly C$1.8 billion relative to a scenario without the implementation of the new duties. As a result, Quebec’s gross value added would be approximately 0.3% below that baseline.
President Donald Trump has imposed a 50% tariff under Section 338 of the Tariff Act of 1930 on select Canadian products. The duties came into effect on Aug. 22 after a three-day suspension period. They target certain electrical and construction items, jewelry, textiles, cosmetics, wood derivatives, plastics, and alcoholic beverages. Even if products comply with the USMCA trade agreement, they remain subject to these duties. Items already affected by other national-security tariffs are excluded from Section 338 coverage.
Oxford Economics indicates that these new U.S. tariffs account for roughly 5.5% of Canada’s projected exports to the United States in 2025. The measures are estimated to elevate the effective U.S. tariff rate on Canadian exports from 5.1% to 6.9%. The primary contributors to this increase are plastics, electrical machinery, and wood and paper goods. The firm highlights that manufacturers in Quebec, New Brunswick, and Ontario face the highest exposure among Canadian provinces due to the specific product mix targeted by these tariffs.
Tariffs intensify Quebec’s manufacturing sector vulnerability
The economic impact on Quebec is further amplified by its dependence on U.S. demand. Official statistics reveal that merchandise exports to the U.S. reached C$84.8 billion in 2025, representing 69.8% of Quebec’s total international merchandise exports. Exports to the U.S. declined by 6.9% from 2024, whereas exports to other nations increased by 10.6%. In the first quarter of 2026, Quebec’s real GDP grew by 0.3%, following a 0.1% decline in the previous quarter.
At the national level, Oxford Economics estimates that the combined effect of the new U.S. tariffs and Canada’s planned retaliatory measures will decrease Canadian GDP by 0.3 percentage points in 2027, compared to the August baseline. The same model projects a rise of about 0.3 percentage points in consumer prices next year. This analysis considers the combined influence of Section 338 duties and Canada’s countermeasures, but does not interpret the C$1.8 billion figure for Quebec as a government budget loss.
Canada’s planned counter-tariffs in response
Starting September 8, the Government of Canada intends to implement counter-tariffs on C$27.6 billion worth of U.S. imports. These tariffs will mirror U.S. rates of 15%, 25%, and 50% on targeted products. The affected sectors include steel, dairy, appliances, agricultural equipment, pulp and paper, plastics, and electronics. Additionally, Canada announced C$7.5 billion in new and enhanced support measures for workers and businesses impacted by U.S. tariffs.
Updated guidance from Quebec’s government has been issued to help companies navigate the U.S. duties and Canadian countermeasures. The province lists the Section 338 tariffs alongside existing U.S. tariffs on steel, aluminum, and related goods. The new measures increase costs for a broad range of Quebec exports, while the U.S. continues to be the province’s primary foreign market. The C$1.8 billion estimate from Oxford Economics quantifies the annual industrial output gap for 2028 compared to a baseline without the new tariffs.