Trade war with the U.S. threatens Quebec economy
By William Crooks
Local Journalism Initiative
A new trade dispute between Canada and the United States is already sending shockwaves through Quebec’s economy, with experts warning of severe consequences for key industries. As of March 4, the U.S. government has imposed a 25 per cent tariff on various Canadian imports, prompting Canada to respond with its own retaliatory measures. The federal government has introduced tariffs on $30 billion worth of U.S. goods, with an additional $125 billion in potential countermeasures currently under consultation.
Professor Mathieu Arès, an Applied Politics expert at the University of Sherbrooke, believes these tariffs could push Canada into a recession. “We’re looking at an estimated economic contraction of 1.5 to 2.6 per cent,” he said. “This isn’t just a minor disruption—it’s a serious economic blow.”
Impact on Quebec’s industries
The tariffs are expected to hit Quebec’s construction and forestry sectors particularly hard. The Association de la construction du Québec (ACQ) has strongly denounced the tariffs in a press release, warning that the higher cost of American building materials will drive up prices and slow down projects. Many essential materials used in Quebec’s construction industry come from the U.S., and finding alternative sources will take time. The ACQ is urging the federal government to ensure its countermeasures do not worsen the situation for local businesses.
Meanwhile, the province’s forestry sector, which exports 85 per cent of its products to the U.S., is also in jeopardy. The retaliatory tariffs may affect American imports of essential Canadian resources, including aluminum, copper, potash, and oil. In response, Quebec’s Minister of Natural Resources and Forests, Maïté Blanchette Vézina, has announced in a release the creation of a special task force aimed at diversifying export markets. “We must protect Quebec’s economy by reducing our dependence on the American market,” she said, emphasizing the need to develop trade relationships with Europe and Asia.
Economic and employment consequences
Arès warns that the tariffs will lead to job losses as companies struggle to remain competitive. “If a product becomes too expensive due to tariffs, American buyers will look elsewhere,” he explained. “That means lost revenue for Quebec companies, layoffs, and reduced business activity.” The auto industry, which relies on cross-border supply chains, is particularly vulnerable. Car parts often cross the border multiple times during production, and each instance now incurs additional costs. “Each part could cross the border up to ten times before reaching the final customer,” Arès noted. “Now, every crossing comes with a 25 per cent tariff. That adds up quickly.”
The tariffs are expected to have repercussions on both sides of the border. Arès points out that American consumers will face higher prices for goods produced with Canadian raw materials. “Basic family expenses in the U.S. will increase, leading to inflation and dissatisfaction,” he said. “This could create political pressure on the U.S. government to rethink its approach.” Products like aluminum for beverage cans, potash for fertilizers, and raw materials for construction could see noticeable price hikes in American markets.
The political game
According to Arès, the trade war is not just about economics—it’s a political maneuver. “Trump wants to force Canadian companies to relocate to the U.S.,” he said. “It’s a way to steal jobs and investment.” He believes that, eventually, public discontent in the U.S. could force a policy reversal. “At some point, reality will hit. When Americans realize how much this is costing them, the pressure will mount on their government.”
He also noted that trade disputes of this nature often have long-term effects on diplomatic relations. “The trust in our American friends has been lost for a long time,” Arès said. “We used to think of the U.S. as our closest ally, but now we realize we cannot rely on them.” Even if the tariffs are lifted, the damage to trade relationships and business confidence could linger for years.
What’s next?
While Canadian businesses can seek temporary relief through government aid, Arès cautions that such support is unsustainable in the long run. “Quebec and Ontario are already running large deficits. They can’t afford to subsidize companies indefinitely,” he said. Some short-term programs may help struggling industries, but he warns that “we can’t just keep running up the credit card forever.”
As consultations continue regarding further Canadian countermeasures, businesses are left to navigate uncertain waters. The coming months will determine whether economic pragmatism prevails over political posturing. Arès believes that, in the long run, good sense will prevail, but the process will not be quick. “Once the damage is done, you can’t just put the toothpaste back in the tube,” he said. For now, industries across Quebec are bracing for the fallout of a potential full-blown Canada-U.S. trade war.