Commerce Secretary Wilbur Ross said Tuesday that new U.S. tariffs on China are aimed at modifying Beijing's behavior and leveling the playing field for American companies competing there.
Ross appeared on CNBC the morning after the administration announced that President Donald Trump will impose 10 percent tariffs on $200 billion worth of Chinese imports, with those duties rising to 25 percent at the end of the year.
In response Tuesday morning, Reuters reports that China said it will institute tariffs on U.S. goods worth $60 billion on Sept. 24.
Ross said on "Squawk Box ," regarding the expected move, that China is "out of bullets" to retaliate because its imports to the U.S. are nearly four times larger than the U.S. exports to China.
"If China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports," Trump said in a statement.
If "phase three" were to be implemented, on top of Monday's announced $200 billion in tariffs and the $50 billion already in place, all Chinese imports would be affected.
According to federal data, the U.S. imported more than $505 billion worth of goods from China last year.
The White House on Monday did remove about 300 goods from a previously proposed list of affected products, including smart watches, some chemicals, bicycle helmets and high chairs.
The tariffs were not "shot from the hip," Ross told CNBC.
"We went item by item, trying to figure out what would accomplish the punitive purpose on China and yet with the least disruption in the U.S.," he said, adding he only sees a minimal increase in inflation.
"Nobody is going to actually notice [prices hikes] at the end of the day," he said , because they will be "spread across thousands and thousands of products."
China is reviewing plans to send a delegation to Washington for trade talks, the South China Morning Post reported on Tuesday, citing a government source in Beijing.
"It's a little disappointing earlier tariffs have not resulted in more constructive dialogue," Ross said. "But we hope these will." Whether talks take place is "in their ballpark," he added.
Ross also said the European Union and Japan have asked to join the World Trade Organization consultation process against China.
— CNBC's Jacob Pramuk and Reuters contributed to this report.