A guide to Trump's tariffs: What they are, how they work and who they'll hurt

President Donald Trump is moving to impose escalating tariffs on Mexican imports to force that government to take a harder line to stem the flow of Central American migrants into the United States, The plan has drawn criticism from business leaders and lawmakers on both sides of the aisle who are concerned the tariffs will hit American industries and consumers where it hurts.

It's the second time in recent weeks that Trump has shaken up trade negotiations with surprise tariffs; on May 5, he announced he would impose large tariffs on Chinese imports. But to understand how the new tariffs will ripple through the economy, here's a guide on tariff basics.

Q: What is a tariff?

A: Tariffs are taxes a nation imposes on goods and services imported from another country. They are paid by companies that import the products, not by the countries themselves.

Q: Why does Trump want to tariff Mexico goods?

A: Trump has said he is imposing the tariffs to punish Mexico for not doing enough to stop Central American migrants from entering the U.S. illegally.

Mexico is the United States' biggest trade partner. The U.S. imported $347 billion in goods from Mexico last year. But the tariffs will compel many American companies to buy fewer goods from Mexico, and U.S. companies that do manufacturing in Mexico may have to move their business elsewhere.

Q: When do they go into effect?

A: A 5 percent tariff will go into effect on June 10. After that, the White House has said it will increase the tax in 5 percent increments each month until October, when the tariffs would top out at 25 percent. The tariffs will remain at that threshold until Mexico "substantially stops" the flow of illegal immigration coming through its territory, according to a statement from the president.

Q: Who ultimately pays for these tariffs?

A: Although Trump often suggests that tariffs are paid by the countries they are imposed on, companies pay the tariffs when they import goods or services. Because few businesses can absorb these kinds of costs, they end up passing them to the consumer in the form of price increases, as National Economic Council Director Larry Kudlow acknowledged in May.

Q: What products are affected by the tariffs?

A: About two-thirds of U.S. imports from Mexico are intermediate parts - pieces that U.S. companies use to manufacture goods - according to Deutsche Bank Securities economist Torsten Slok. American automakers like General Motors and Ford and heavy equipment companies like Caterpillar use intermediate parts from Mexico, and their goods often cross the border multiple times as they are being assembled.

Among popular intermediate parts are computer and electronic components, wires and cables. Many chemicals and raw materials, like oil and gold, come into the U.S. through the southern border.

The U.S. brings in a great deal of produce from Mexico, from avocados to cauliflower, pineapples to tomatoes. Mexico also supplies some of the best-selling beers in the U.S., including Corona and Modelo Especial.

Q: What will Mexico do in response?

A: Mexico has yet to announce a specific course of action, but officials have vowed to respond "strongly". Mexican President Andrés Manuel López Obrador sent Trump a letter Thursday evening after the tariffs were announced, saying he would send his foreign minister to negotiate in hopes of reaching an agreement "that benefits both nations."

Q: How are tariffs supposed to address the flow of migrants at the U.S.-Mexico border?

A: The White House has yet to explain exactly how driving up the cost of Mexican goods could stem the flow of migration. Many experts believe the tariffs could actually have the opposite effect: If the tariffs damage the Mexican economy, more of its citizens may try to cross the border in search of work in the U.S.

Q: How does this relate to China tariffs?

A: The tariffs Trump imposed on Mexico have no direct correlation to the recent 25 percent tariffs Trump levied against $250 billion in Chinese imports. But both are instances of the president using tariffs as a brute-force negotiation tactic to deal with what he sees as a lack of progress on key issues.