Since U.S. President Donald Trump imposed tariffs on Canada, Mexico and China on Saturday, concerns about a tariff war have emerged within the South Korean automobile industry.

According to the New York Times on Saturday, thousands of companies in Asia and Europe, which have invested billions of dollars to build North American supply chains in recent years, are now facing major setbacks due to Trump’s tariffs.

The tariffs are expected to immediately affect the cost structures of domestic automobile manufacturers and parts companies that entered Canada and Mexico with a focus on U.S. exports.

The U.S. newspaper mentioned that Hyundai Motor Group could suffer significant damage as the company has factories in Monterrey, Mexico.

Kia produced 253-thousand vehicles in Mexico between January and November last year, of which 128-thousand were sold in the U.S. 

Hyundai is reportedly considering exporting its cars made in Mexico to Canada, South America or Europe or moving its plants to the U.S. 

Given South Korea’s large trade surplus with the U.S., observers have also raised the possibility that the U.S. could impose similar tariffs on this country, which would be detrimental to its export-driven economy.

The U.S. accounts for 18-point-seven percent of South Korea’s total exports, and automobiles represent nearly 50 percent of all the country’s exports to the U.S.