President Donald Trump is slapping new tariffs on Mexico unless the country halts illegal immigration to the U.S, but several business groups say the policy will ultimately do far more harm than good.

Trump announced a 5 percent tariff on Mexican imports starting on June 10, according to a White House statement provided to news outlets. That amount will rise 5 percent every month until it hits 25 percent. The administration won't back off until Mexico substantially curtails the number of illegal immigrants entering the U.S.

The policy is threatening to derail the already tenuous U.S.-Mexico-Canada Agreement, which is the administration's proposed replacement for the North American Free Trade Agreement. But perhaps more importantly, the tariffs are being levied against one of the nation's largest trading partners, with Mexico importing a wide variety of U.S. goods.

"By imposing escalating tariffs on Mexico, our second-largest export market and third-largest trading partner, President Trump has again chosen to increase taxes on U.S. businesses, American workers and American consumers," said Rick Helfenbein, CEO of the American Apparel & Footwear Association. "Because of President Trump's tax increase, Americans will pay more for everything from jeans to cars to computers to machinery."

Consumer Technology Association CEO Gary Shapiro called the decision "a short-sighted, short-tempered reaction."

"This administration must understand using tariffs to penalize other countries—whether that's China as a negotiating tactic or our close ally Canada for allegedly being a ‘national security threat'—means American families, workers and companies pay the price," Shapiro said.

Business Roundtable said in a statement that the tariffs jeopardize the trade agreement Trump has been so eager to reach: "Unilateral tariffs on all Mexican imports will not solve the urgent problems of securing our border and fixing our broken immigration system."

National Association of Manufacturers CEO Jay Timmons struck a more moderate tone. While saying the tariffs would have "devastating consequences" for U.S. manufacturers, he echoed the administration's argument that Congress has failed to act in reforming the immigration system.

"Manufacturers, like so many Americans and like President Trump, are frustrated with our broken immigration system and by the inaction that has led to a true humanitarian crisis. …We continue to urge the administration and Congress to work together to address this crisis because the problem will not be solved just by blaming other countries," Timmons said.

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