Besides, China is also committed to cutting steel capacity by 30 million tonnes in 2018, which should help to cushion the impact of excess steel supply.
From January to September last year, the U.S. imported 26.9 million tonnes of steel.
U.S. President Donald Trump on Thursday signed the order to impose duties of 25 percent on imported steel and 10 percent on aluminium.
Affin Hwang Investment Bank chief economist Alan Tan also agreed the tariffs are not expected to affect Malaysian trades due to the limited exposure.
According to Malaysia's Ministry of International Trade and Industry, Malaysia's steel and aluminium exports to the U.S. last year only accounted for 0.2 percent of the total trades.
Tan also believed Malaysia's diversified export structure is able to support the country's economy amid the U.S. protectionism threat.
Malaysia's total exports in 2017 stood at 935.4 billion ringgit (239 billion U.S. dollars). Singapore was the country's largest importer, accounting for 14.5 percent shares, followed by China (13.5 percent) and the U.S. (9.48 percent).
Tan, however, opined that the biggest risk is the retaliation from other major economies against the U.S. tariffs.
"If this happens, it may lead to a full-blown trade war between major economies. This will have a more significant impact on Malaysian economy," he told Xinhua.
At the moment, Tan believed the trade duties are still limited to selective products. "I don't expect it (trade war) to happen soon, although the U.S. may target on other imported products going forward," he added.
Earlier in January, Trump announced it would impose as much as 50 percent tariffs on imported washing machines and up to 30 percent tariffs on imported solar panels.
While a complete halt in Malaysia's photovoltaic exports to the U.S. is unlikely, the tariffs may erode Malaysia's market share or margins and discourage relocation of foreign photovoltaic firms to Malaysia, CIMB Research's economist Michelle Chia said in her earlier report,
Malaysia is the world's largest photovoltaic exporter to the U.S., with a market share of 30 percent of U.S. photovoltaic imports. Its photovoltaic exports to the U.S. accounted for 1.1 percent of Malaysia's total exports in 2016, according to the report.