06:10 AM EDT, 04/03/2025 (MT Newswires) -- The latest wave of tariffs announced by the Trump administration late Wednesday is likely to present "severe downside risks" to the growth of many Asian economies this year, HSBC Global Research said Thursday.

The additional 34% tariff imposed on China is a "serious challenge" that will require increased policy support, HSBC analysts said in a note.

Japan, which was levied a 24% tariff, may also be affected. Automotive exports to the US, which account for about 7% of Japan's total exports of all products to the world, are at risk, following Trump's 25% tariff on all autos, according to the note.

To get an exemption or certain carveouts, the analysts expect that Japan may explore further expanding market access for US agricultural exports and increase its purchase of US defense equipment.

Korea and Taiwan will likely pursue a similar strategy as Japan and increase imports of US products, including military hardware, the analysts said, adding that Korea's growth may be "particularly impacted" by the tariffs considering its exposure to the US market and reliance on auto exports to the US.

In Southeast Asia, Thailand's manufacturing sector may face more hurdles following the US auto tariffs as it competes with highly competitive Chinese exporters as well as Japanese and Korean automakers, the firm said.

Meanwhile, the Philippines, which received a 17% tariff, now has a "relative" US tariff advantage relative to some of its ASEAN peers, according to the analysts.

India, which received a 26% reciprocal tariff, may have suffered from a larger impact had pharmaceuticals -- a key Indian export to the US -- not been largely exempted from the tariffs, HSBC said.

"As the impact of US tariffs reverberate across Asia, regional leaders will now need to decide whether they want to retaliate against, or negotiate with, Washington," HSBC analysts said. "The former, while understandable from a negotiating or political perspective, could worsen the impact on local growth."