QUEBEC / RankWire.AI / – According to Oxford Economics, Quebec is set to experience the largest provincial industrial decline in Canada as a consequence of the recent US tariffs. The research firm projects that by 2028, Quebec’s annual economic output could decrease approximately C$1.8 billion below its previous baseline. This shortfall represents roughly 0.3% of the province’s gross value added. It is important to note that this forecast reflects a loss in economic activity rather than direct financial impacts on government revenues. Given its manufacturing sector, Quebec is at the heart of the latest trade disruptions.
President Donald Trump implemented new tariffs of 50% on certain Canadian goods under Section 338 of the Tariff Act of 1930. These duties came into effect on Aug. 22 after a three-day suspension. The targeted products encompass electrical appliances, construction materials, jewelry, textiles, cosmetics, plastics, and some wood derivatives. Alcoholic beverages and various other Canadian exports are also affected by these measures. Even products that comply with the USMCA trade agreement can be subject to tariffs.
Oxford Economics estimates that these latest tariffs account for about 5.5% of Canada’s exports to the US in 2025. The organization calculates that Canada’s effective US tariff rate increases from 5.1% to 6.9%. The rise is mainly driven by plastics, electrical machinery, wood products, and paper goods. Among the provinces, Quebec, New Brunswick, and Ontario are most exposed to manufacturing risks in the firm’s analysis. Quebec is projected to suffer the greatest decline in industrial production due to these measures.
Manufacturing Vulnerability Places Quebec in the Lead
The extensive trade relationships between Quebec and the United States help explain the magnitude of the expected impact. Data from the province reveal that merchandise exports to the US reached C$84.8 billion in 2025, constituting 69.8% of Quebec’s total international merchandise exports that year. While exports to the US decreased by 6.9% from 2024, exports to other nations increased by 10.6%. As a result, Quebec’s real GDP grew by 0.3% during the first quarter of 2026.
The national outlook also considers the effects of tariffs and Canada’s planned responses. Oxford Economics estimates that combined measures will reduce Canadian GDP growth by 0.3 percentage points in 2027. Its model also forecasts consumer prices to be roughly 0.3 percentage points higher than the previous baseline next year. These projections incorporate both the new US duties and Canadian counter-tariffs. The forecast for Quebec also separately measures the anticipated annual industrial output shortfall by 2028.
Canada Prepares to Implement Countermeasures in September
Starting Sept. 8, the Canadian government plans to impose counter-tariffs on C$27.6 billion worth of US imports. The rates will vary among product categories, set at 15%, 25%, and 50%. The targeted items include steel, dairy products, household appliances, agricultural machinery, pulp, paper, plastics, and electronics. Additionally, Canada announced C$7.5 billion in new and expanded support measures for workers and businesses affected by the trade restrictions. These steps follow the recent escalation of US trade barriers against Canadian exports.
Quebec’s authorities have revised their guidelines for companies impacted by both the US tariffs and Canadian countermeasures. The province now lists Section 338 duties alongside existing US tariffs on steel, aluminum, and related products. The new restrictions extend to a broader array of goods exported by Quebec firms. The United States remains Quebec’s leading foreign market by a substantial margin. Oxford Economics projects the province’s annual industrial output loss to reach about C$1.8 billion by 2028.