US-Canada trade war reshapes Ontario manufacturing and US swing states
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The US-Canada trade war has hit Ontario's manufacturing hardest, with tens of thousands of jobs lost since early 2025. Canada's counter-tariffs on C$28bn of US goods are set to impact key swing states from 8 September. The dispute shows no sign of resolution 18 months after President Trump's return to the White House.
Key Facts
- Ontario has lost tens of thousands of manufacturing jobs since early 2025 due to US tariffs on autos and steel.
- Metal exports from Quebec fell 36% between February 2025 and 2026, with a 3.6% drop in sector employment.
- Canada's counter-tariffs target C$28bn of US goods, including steel, furniture, cosmetics, and toilet paper, effective 8 September.
- The US imposed an additional 50% levy on about C$28bn of Canadian goods last week.
- The Royal Bank of Canada identifies Ontario and Quebec as the most impacted provinces by US sectoral tariffs.
Ontario Manufacturing Losses
Ontario, Canada's most populous province, has been hardest hit by US tariffs on autos, steel, and aluminum. Several Ontario auto parts and assembly plants have announced layoffs and production cuts. The province is estimated to have lost tens of thousands of manufacturing jobs since early 2025. The Royal Bank of Canada ranks Ontario and Quebec as the most exposed provinces to US sectoral tariffs.
Quebec Metal Export Decline
Quebec produces steel, copper, and aluminium, all subject to US tariffs. Metal exports from Quebec fell 36% between February 2025 and 2026. Employment in Quebec's metal sector dropped 3.6% over the same period, according to July data.
US Swing State Exposure
Canada's counter-tariffs apply to C$28bn worth of US goods, including steel, furniture, cosmetics, and toilet paper. The tariffs take effect on 8 September and are expected to impact key swing states. The US economy is larger, so the overall impact of Canadian retaliation will be less stark than in Canada. British Columbia, Quebec, and Ontario will bear the brunt of additional US tariffs on $20bn of Canadian goods that began 22 August.
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US-Canada trade war reshapes Ontario manufacturing and US swing states
