How will 50% U.S. tariffs on steel, aluminum impact Quebec’s economy?

Tariffs on aluminum and steel entering the United States jumped from 25 up to 50 per cent on Wednesday.

This came after U.S. president Donald Trump signed an executive order on Tuesday to double these tariffs.

RELATED: Carney says Canada will take ‘some time’ to respond to doubled U.S. metal tariffs

In Quebec, a major aluminum producer, the new 50 per cent tariffs could have a significant impact on the industry.

“The price of aluminum will reach or is reaching a level where many aluminum components will be too expensive,” said François Racine, the president of AluQuébec. “And obviously it will contribute to creating more inflation.

“It is literally destroying the market. And both on the Canadian and U.S. side.

“Many of our members have lost their U.S. sales and layoffs have been seen. So we’ve seen the job cuts.”

The Quebec government says it’s doing what it can to help the industry. “What we’re focusing on right now is helping businesses,” said Quebec Premier François Legault. “We already have programs to help them with liquidity.”

Moshe Lander, a Concordia University economist, says these new tariffs could have a prolonged effect on the sustainability of the aluminum industry in Quebec, suggesting the volatility of its price could have an impact on future investments.

“When you increase the tariffs from 25 per cent to 50 per cent, now you’re really talking about the longer-term effects that are going to be that this is an industry that could find itself in decline,” Lander told CityNews. “Even if somehow the tariffs were to go away, businesses are going to be apprehensive about investing in the province when the fear is that they could come back at the snap of a finger. We’ve shown that Trump’s policy is not entirely consistent.”

From March: Quebec facing layoffs, fewer contracts as U.S. imposes 25% tariff on aluminum, steel

Lander adds there could be job losses in both the steel and aluminum industries, which could cause a decline in tax revenue and an increase in the budget deficit for the Quebec government.

“The workers who have now lost their money or their jobs are no longer going to be paying taxes either,” Lander explained. “So that means government revenues are going to go down as well. In Quebec, you have a government that has a huge budget deficit, a dangerously large budget deficit that’s now only going to get bigger.”

The tariffs introduced by Trump are also being criticized because there already exists a free trade agreement between Canada and the United States.

“Things could change pretty quickly, but at this point it’s a little bit frightening to see that kind of decisions could be made so quickly with so much damage that is being created,” Racine said.

Montrealers are bracing for the worst.

“I don’t think there’s much we can do,” Robert Dunn told CityNews. “We have to wait it out, and hopefully enough pressure comes from his own industries.”

“I think it’s awful,” said Kenny Wee. “The fact that he actually signed off, I think it’s going to affect a lot of businesses.”

“We’re just going to have to strap our belts and go through it,” added Louis Boissonneault.