Quebec Economy Braces for Impact from Escalating US-Canada Trade War

The U.S.-Canada trade spat has taken a turn for the worse, with both countries imposing fresh rounds of tariffs on each other's goods. Quebec is among the hardest-hit provinces, accounting for over $8 billion in exports to the U.S.

The new tariffs will affect various industries in Quebec, including wood and forest products, machinery, furniture, lighting, clothing, food, beverages, and alcohol. The U.S. has imposed 50% tariffs on Canadian goods worth approximately $28 billion, while Canada will retaliate with tariffs of between 15% to 50% on U.S. imports.

The dispute is expected to increase costs for Quebec companies and lead to job losses. According to a survey by the Quebec Federation of Chambers of Commerce, affected companies reported average losses of $2.07 million, which are projected to reach $6.09 million within six months. The average number of jobs eliminated at those companies is expected to rise from 10 to 38 over the same period.

Ottawa has announced $7.5 billion in new and expanded assistance across Canada, including $1.5 billion for smaller businesses and a $2-billion diversification fund. Quebec will also offer favourable loans to exporters and their suppliers.