The US blacklisted 28 Chinese state-owned and private organizations and companies for their alleged association with ethnic-majority Uighur violence in China's Sinkjang province, with a majority Muslim population.
They are now on the so-called "entity list", which prohibits them from purchasing products from US companies without Washington's approval.
Government agencies, including technology companies specializing in surveillance equipment, are also banned, the BBC reports.
It is not the first time Washington has imposed trade bans on Chinese companies, the most famous being the case of telecommunications giant Huave, which is on the list for security issues.
The reason for imposing the ban is that these organizations are "involved in human rights abuses and abuses".
Human rights organizations believe Beijing is persecuting mostly Muslim Uighurs in so-called "re-education camps," while China says it is "fighting extremism."
The list includes about 19 government agencies, including the Provincial Public Security Bureau.
The same, according to the BBC, are surveillance companies like Hickwijon, Dahua and Megvi Technology, which specialize in face recognition technology.
The US and China are in the midst of a trade war.
Human rights groups and the UN say China has surrounded and imprisoned more than a million Uighurs and other national minorities in detention camps, forced to renounce Islam, speak Mandarin Chinese only and learn obedience to the Communist government.
China denies it and says that these people attend "vocational training centers" so that they can find a job and help integrate into Chinese society, all in the name of preventing terrorism.