Kim Sang-Duk, or Tony Kim, was arrested Saturday at Pyongyang's airport as he was about to leave the country after a teaching stint at a university founded by evangelical Christians.
Haley said the action was an attempt by Kim Jong-Un's regime to use the American as a bargaining chip amid heightened international tensions over its nuclear and missile programs.
"What we're dealing with is a leader who is flailing right now," she said on CBS This Morning.
"And I think what he's trying to do is show his citizens that he has muscle, whether it's through his rhetoric or whether it's through his actions," she added.
The United States is still gathering information about the latest incident, the ambassador said.
Kim is the third American held in North Korea.
"We always want to get every citizen out alive and healthy and make sure that they're being treated properly," she said. "And so those are the things we'll start to work on."
US President Donald Trump on Sunday talked with China's President Xi Jinping, who urged "restraint" on North Korea, the Chinese foreign ministry said.
The United States has deployed an aircraft carrier strike group led by the USS Carl Vinson to the western Pacific as tensions have escalated over a series of North Korean missile tests and signs it may be preparing a sixth nuclear test.
US officials have warned that "all options are on the table" in dealing with the North Korean threat but have so far relied on China to rein in its unpredictable ally.
"I think you're gonna continue to see pressure on North Korea," Haley said.
"We have said, for quite a while now, that the United States is not looking for a fight," she added. "So North Korea doesn't need to give us a reason to have one. And I think that they're panicking right now."
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