Trump outlined sanctions against 56 entities linked to North Korea.
"Today I am announcing that we are launching the largest-ever set of new sanctions on the North Korean regime," Trump said.
The US president said the Treasury Department will soon take action to further cut off sources of "revenue and fuel" that North Korea uses to fund its nuclear program and sustain its military.
Trump said the effort will target more than 50 "vessels, shipping companies, and trade businesses that are assisting North Korea in evading sanctions."
Treasury Secretary Steve Mnuchin confirmed the sanctions covered "virtually all the ships" North Korea is "using at this moment in time."
US vice president Mike Pence on a visit to Japan recently had hinted about the sanctions which the US president has now put into effect.
The president's decision comes even as his daughter Ivanka is in South Korea for the Winter Olympics.
Trump's sanctions comes as tension in the Korean peninsula has cooled in recent weeks after North Korea decided to send a delegation for the Winter Olympics and took part in a joint ice skating team with its neighbour.
North Korea leader's sister Kim Yo Jong visited South Korea for the opening ceremony of the Winter Game at Pyeongchang which was closely followed worldwide, after a series of nuclear tests over the past several months by Kim had severely dented relations between the two nations.