Quebec’s U.S. Exports Drop 3.5% as Sales to the Rest of the World Jump 15.5%

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Quebec’s export map is changing at a moment when its relationship with the United States is under unusual pressure. New trade data released on October 21 show that the province’s merchandise exports to the U.S. fell 3.5% during the first eight months of 2026 compared with the same period a year earlier. Over that same stretch, exports to every other country combined jumped 15.5%.

The result was a 2.0% increase in Quebec’s total exports when measured in current dollars and without seasonal adjustment. The figures do not mean the U.S. has stopped being Quebec’s dominant foreign customer, but they do show that growth elsewhere is becoming large enough to offset a meaningful decline south of the border.

The U.S. Is Still Quebec’s Biggest Customer — but Its Share Is Shrinking

From January through August, Quebec shipped about C$53.8 billion in goods to the United States, down from roughly C$55.8 billion in the same period of 2025. Total exports to all countries reached about C$79.9 billion, up from C$78.3 billion. On that basis, the U.S. accounted for roughly 67.4% of Quebec’s international merchandise exports, compared with about 71.2% a year earlier. The change is significant because it happened even while the American market remained vastly larger than any other single destination.

The arithmetic also shows why the rest of the world matters more this year. Quebec’s exports outside the U.S. rose to about C$26.0 billion from C$22.5 billion, an increase of roughly C$3.5 billion. That was enough to more than compensate for the approximately C$2.0 billion decline in U.S.-bound sales. For manufacturers and resource producers, the story is therefore not simply one of lost American demand. It is also one of new or expanded orders in other markets beginning to carry more weight in the province’s overall export performance.

Mexico and Europe Are Doing Much of the Heavy Lifting

Several of Quebec’s fastest-growing export destinations are outside its traditional U.S. market. Exports to Mexico reached about C$1.78 billion in the first eight months of 2026, up 52.8% from a year earlier. France rose 42.6% to about C$1.84 billion, the Netherlands climbed 40.5% to C$1.72 billion, and the United Kingdom jumped 48.1% to roughly C$1.23 billion. Italy also posted a 22.6% gain, while Germany increased 5.9%.

The pattern is broad, but it is not universal. Exports to China were up a more modest 5.4% to about C$3.0 billion, while shipments to Japan fell 12.8% to roughly C$1.30 billion. India rose 6.2%. That mix matters because it shows diversification is not a single wave lifting every market equally. Some destinations are expanding rapidly, others are growing slowly, and at least one major Asian market is moving in the opposite direction. The strongest conclusion is therefore not that Quebec has found a replacement for the U.S., but that its export growth is being spread across a wider set of customers than it was a year ago.

The Latest Month Was Weaker, Showing How Volatile the Trade Picture Remains

The year-to-date geographic shift came despite a softer August. Quebec’s international merchandise exports fell 0.9% from July when measured in seasonally adjusted, constant 2017 dollars. That followed a revised 7.7% monthly increase in July. Aircraft exports dropped 49.0% in August, commercial and service industry machinery and equipment fell 23.0%, iron ores and concentrates declined 10.1%, and aviation fuel dropped 38.7%. Those are large moves for sectors capable of changing the monthly headline quickly.

At the same time, several categories moved sharply higher. Heavy fuel oil exports surged 134.4%, diesel and biodiesel rose 104.8%, other transportation equipment climbed 115.1%, and unwrought copper and copper alloys increased 39.9%. Over the first eight months, Quebec’s exports were down 2.7% in the seasonally adjusted constant-dollar series, even though they were up 2.0% in the current-dollar, non-seasonally adjusted series used for the U.S.-versus-rest-of-world comparison. Both figures can be correct because one adjusts for prices and seasonal patterns while the other measures the nominal value of shipments.

Aircraft and Aluminum Can Move Quebec’s Totals Quickly

Quebec’s export base is concentrated in several large industrial sectors, which helps explain why monthly results can swing so sharply. In the first half of 2026, the province’s five largest export categories were unwrought aluminum and aluminum alloys at C$5.0 billion, aircraft at C$4.3 billion, iron ores and concentrates at C$2.6 billion, aircraft engines at C$2.1 billion, and aircraft parts and other aerospace equipment at C$1.7 billion. A change in only one of those categories can therefore have a visible effect on the province-wide total.

The U.S. is especially important for several of those products. It purchased 80.1% of Quebec’s unwrought aluminum exports in the first half of the year, 53.3% of its aircraft, 56.7% of its aircraft engines and 66.3% of its aircraft parts and other aerospace equipment. Iron ore was different: China was the largest destination at 40.5%, followed by Japan at 13.2%. That contrast illustrates the underlying challenge. Some of Quebec’s biggest industries are still deeply tied to American buyers, while others already depend on a much more global customer base.

Diversification Is Real, but It Does Not Mean Decoupling From the U.S.

A broader measure of Quebec’s merchandise trade also points to a gradual reduction in U.S. concentration. During the first half of 2026, the United States represented 47.6% of Quebec’s total international merchandise trade when exports and imports were combined. That share was below 50% for a second consecutive half-year and was the lowest since the second half of 2012. Even so, two-way trade with the U.S. still totaled about C$62.3 billion in just six months.

The commercial relationship also remained unusually important to Quebec’s trade balance. In the first half of 2026, Quebec posted a C$18.7 billion merchandise trade surplus with the United States. Among its ten largest trading partners, the Netherlands was the only other one with which Quebec recorded a surplus, and that surplus was only about C$267 million. The American surplus was down from C$21.9 billion a year earlier, but its size shows why diversification should be understood as risk reduction rather than a clean break. A province can sell more to Europe, Mexico and Asia while still depending heavily on the U.S. for production schedules and export revenues.

Tariffs Make the Shift More Than a Statistical Curiosity

The change in export destinations is unfolding against a much harsher North American trade environment than Quebec companies faced only a few years ago. As of late September, the Quebec government’s tariff summary listed U.S. duties of 50% on steel and aluminum, 25% on certain steel and aluminum derivative products, and a 10% universal tariff on many goods that do not qualify for CUSMA treatment. Separate measures also apply to autos, copper, lumber, certain semiconductors and other categories, while qualifying CUSMA goods are generally exempt from the universal tariff.

For a Quebec exporter, those rules can alter the economics of a shipment long before the impact becomes visible in an annual trade table. An aluminum producer selling into the Midwest, for example, faces a very different pricing calculation when a major sectoral tariff applies, while a manufacturer able to qualify for preferential CUSMA treatment may retain better access. Quebec has responded with measures designed to help companies preserve liquidity, improve competitiveness and diversify markets. The trade data alone cannot prove that tariffs caused every dollar of the 3.5% U.S. decline, but the policy environment gives exporters a strong economic reason to look for additional customers.

Quebec Has Been Trying to Build More Routes to Market

The shift in the data also lines up with Quebec’s stated trade policy. The province’s international policy lists diversifying trade as its first priority area, while calling for stronger commercial activity in Europe, the Indo-Pacific and other regions without abandoning the United States. Quebec’s separate U.S. strategy takes a similar two-track approach: expand activity in core American markets while also identifying opportunities in high-potential markets and developing a broader diversification strategy.

Quebec also benefits from Canada’s network of international trade agreements, which can provide qualifying exporters with preferential access to markets including the European Union, United States, South Korea, Japan and Mexico. Geography offers another advantage. The provincial government highlights Quebec’s position between North America and Europe and its ability to move merchandise by road, rail, sea and air. Diversification, in other words, does not require choosing Europe, Asia or Mexico instead of the United States. It can mean developing enough additional commercial channels that a disruption in one market does less damage to exporters at home.

What the Numbers Say — and What They Do Not

The strongest takeaway from the first eight months of 2026 is that Quebec’s exporters have so far found enough growth outside the U.S. to overcome a decline in their largest foreign market. The rest-of-world increase added roughly C$3.5 billion in export value compared with a year earlier, while U.S. sales fell by about C$2.0 billion. That left total current-dollar exports 2.0% higher. It is a meaningful change in the composition of trade, especially because the U.S. share of Quebec’s year-to-date exports fell by almost four percentage points.

Still, eight months do not establish a permanent structural shift. Quebec’s monthly exports remain volatile, large aerospace and commodity shipments can move the totals quickly, and the non-U.S. gains are spread among markets that individually remain much smaller than the United States. The next question is whether Mexico and the fast-growing European destinations can maintain their momentum while U.S. sales stabilize or recover. If they can, Quebec could emerge with a more balanced export portfolio. If those gains fade, the sheer size of the American market means the province’s dependence on its southern neighbour will become visible again very quickly.

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