He said, however, the tariffs may offer opportunities for Korean companies to find new export markets.

South Korea will “actively consider” whether there is room for negotiation on the tariffs with the US, even though Trump raised tariffs on steel and aluminium imports on Monday to a flat 25% “without exceptions or exemptions”.

Cheong was speaking at a meeting with officials from steel companies in Seoul.

South Korean steelmakers extended losses on Tuesday. POSCO Holdings closed down 0.8%, falling for a second straight day, and Dongkuk Steel Mill fell 0.9% to close at a three-month low, while the broader KOSPI market rose 0.7%.

2018 exemptions

During Trump’s first term in 2018, South Korea and the US agreed on an annual duty-free steel quota of 70% of volumes shipped to the US on average from 2015-17.

The deal made South Korea the first US ally to secure an indefinite exemption on the steel tariffs.

“Thus, we see room for negotiation with the second Trump administration if necessary,” Citi said in a report.

Citi estimates that the latest US steel tariffs will have a negative impact on South Korea’s economy by around 0.11% to 0.22% of gross domestic product.

South Korea is the fourth biggest seller of steel in the US, behind Canada, Mexico and Brazil last year, according to American Iron and Steel Institute data.