QUEBEC / RankWire.AI / – Quebec stands to absorb Canada’s largest provincial industrial setback from the latest U.S. tariffs, according to Oxford Economics. The research firm estimates Quebec’s annual output could fall about C$1.8 billion below its previous baseline by 2028. That gap equals roughly 0.3% of provincial gross value added. The forecast measures lost economic output rather than a direct loss to government finances. Manufacturing exposure places Quebec at the center of the latest trade disruption.
President Donald Trump imposed new 50% duties on selected Canadian products under Section 338 of the Tariff Act of 1930. The tariffs took effect Aug. 22 following a three-day suspension. Covered products include electrical goods, construction materials, jewelry, textiles, cosmetics, plastics and some wood derivatives. The measures also apply to alcoholic beverages and certain other Canadian exports. Eligible products can face the duties even when they meet requirements under the USMCA trade agreement.
Oxford Economics estimates the latest measures cover about 5.5% of Canada’s 2025 exports to the United States. The firm calculates that Canada’s effective U.S. tariff rate rises from 5.1% to 6.9%. Plastics, electrical machinery, wood products and paper goods account for much of the increase. Quebec, New Brunswick and Ontario carry the greatest manufacturing exposure among the provinces in the firm’s assessment. Quebec faces the largest projected loss in industrial output.
Manufacturing exposure puts Quebec at forefront
Quebec’s close trade links with the United States help explain the scale of the projected impact. Provincial data show merchandise exports to the U.S. totaled C$84.8 billion in 2025. Those shipments accounted for 69.8% of Quebec’s international merchandise exports that year. Exports to the U.S. fell 6.9% from 2024, while exports to other countries increased 10.6%. Quebec’s real GDP then grew 0.3% during the first quarter of 2026.
The national outlook also reflects the effects of tariffs and Canada’s planned response. Oxford Economics estimates the combined measures will reduce Canadian GDP growth by 0.3 percentage points in 2027. Its model also puts consumer prices about 0.3 percentage points above its previous baseline next year. Those estimates include both the new U.S. duties and Canadian counter-tariffs. The Quebec figure separately measures the expected annual industrial output gap by 2028.
Canada sets counter-tariffs for September
The Government of Canada plans counter-tariffs on C$27.6 billion of U.S. imports starting Sept. 8. Ottawa set rates of 15%, 25% and 50% across different product groups. The list includes steel, dairy products, household appliances, agricultural equipment, pulp, paper, plastics and electronics. Canada also announced C$7.5 billion in new and expanded support for affected workers and businesses. The measures follow the latest increase in U.S. trade barriers on Canadian goods.
Quebec’s government has updated its guidance for businesses affected by the new U.S. tariffs and Canadian countermeasures. The province lists Section 338 duties alongside existing U.S. tariffs on steel, aluminum and related products. The latest restrictions now reach a broader range of goods sold by Quebec exporters. The United States remains Quebec’s largest foreign market by a wide margin. Oxford Economics places the province’s projected annual industrial output shortfall at about C$1.8 billion by 2028.