Critics have pointed out the USA decision will further escalate tensions between the two countries after Trump, on Monday, put the country back on the list, saying, "Should have happened a long time ago".
Experts have warned that blacklisting North Korea would have limited practical effect but makes finding a diplomatic solution to the standoff more hard.
"North Korea's nuclear and ballistic weapons programmes are the product of a rational cost-benefit analysis". The sanctions specifically named four companies in Dandong that have been trading with North Korea despite United Nations sanctions that China's President Xi Jinping has said he fully supports.
"This is a serious provocation and a violent infringement upon our dignified country", a North Korea spokesman told the state's Korean Central News Agency.
The sanctions showed the determination of the U.S.to stifle trade across the Yalu or Amnok River between the Chinese city of Dandong and Sinuiju on the North Korean side.
Air China last cancelled flights to North Korea in April, citing low customer demand, but resumed them soon after.
These and other sanctions will surely give North Korea a hard time. On Tuesday the U.S. unveiled its fresh sanctions which also targeted North Korean shipping, raising the pressure on the North to abandon its nuclear programme. The U.S. has maintained North Korea must cease its program before negotiations can begin.
Christopher Hill is the former US diplomat who was instrumental in persuading first the secretary of state at the time, Condoleezza Rice, and then President Bush, to pull North Korea's name from the "terror list".
North Korea has yet to comment on the defection of a North Korean soldier who is being treated for gunshot wounds in South Korea after being shot by comrades during his escape.
Air China's decision came shortly after a visit by a senior Chinese envoy to the North Korean capital of Pyongyang. The spokesperson noted that their actions included expulsion of North Korean workers and diplomats. North Korea quickly lashed out at Trump, calling him a "kingpin of all kinds of terrorism" and accusing him of being unable to prevent terrorism in his own country.
He further disclosed that the designation is long overdue step and part of the U.S.