By exempting Mexico and Canada from new tariffs, President Donald Trump is hoping to incentivize those nations to strike a fair deal on the North American Free Trade Agreement, Commerce Secretary Wilbur Ross told CNBC on Thursday.
"There's no question that the action the president took today is a further motivation to both Canada and Mexico to make a fair arrangement with the United States," he said in an interview with "Closing Bell."
"This is not being done, though, just as a negotiating ploy," he added.
Trump has repeatedly threatened to pull out of NAFTA if the nations can't find a way to overhaul the pact.
On Thursday afternoon, the president signed off on tariffs that slap a 25 percent levy on steel imports and a 10 percent charge on aluminum. Canada and Mexico are exempt from the tariffs, which will take effect in 15 days. The U.S. will also give other nations the opportunity to justify why they shouldn't be included.
"We are deadly serious about solving the problem in steel, aluminum and, as the weeks and months go by, other industries," Ross said.
He also reiterated his contention that the tariffs will not have harmful economic consequences.
Last week, Ross told CNBC the tariffs are "no big deal" and held up a can of soup to make his point that they will have a "trivial" impact on prices.
On Thursday, he said he used that soup prop to illustrate that the impact is "a fraction of a penny per can."
"Please spare me the idea that this is going to be massively destructive to our economy," he said. "All this talk about destruction in the other industries is simply not going to happen."
Critics have argued for more targeted tariffs, pointing out that China is the main offender.
However, Ross told CNBC the tariffs had to be broad since China is moving steel into the U.S. through other countries.
"China has been very clever at trans-shipping product through other countries and dislodging domestic demand in other countries, which causes their producers to dump on us," he said.
After Trump's initial comments on tariffs last week, Chinese officials urged the U.S. to support global trade.
And with Canada and Mexico being exempt from the tariffs, that doesn't necessarily mean China can find a way to move steel through them. Ross said the U.S. can work something out through NAFTA or a separate agreement.