The Trump administration is seeking to curb migration from Central America by introducing new rules over who can claim asylum in the US.
Under the new rules, announced on Monday, migrants who travel via another country before reaching the US border will be ineligible for US asylum.
Migrants who have been trafficked will be exempt from the ban.
A legal challenge against the US restrictions is expected, the Associated Press news agency reports.
Announcing the rule change, Attorney General Bill Barr said it would deter “economic migrants” from exploiting the US asylum system.
“The United States is a generous country but is being completely overwhelmed by the burdens associated with apprehending and processing hundreds of thousands of aliens along the southern border,” Mr Barr said in a statement.
The move comes after a court in Guatemala temporarily blocked a migration deal which could have seen the Central American nation defined as a “safe third country”.
The Trump administration has suspended aid to Guatemala, as well as Honduras and El Salvador, arguing they are not doing enough to curb the migrant flow.
Guatemala’s president, Jimmy Morales, has been under pressure from the US, but Guatemala’s constitutional court granted an injunction late on Sunday which effectively blocks him from signing the deal.
“Safe third country” agreements require migrants to seek asylum in the first country designated as “safe” they reach rather than proceed to a country of their choice.
Such a deal would affect the thousands of Hondurans and Salvadoreans who cross Guatemala on their way north to the US, who – under such a deal – would face being sent back to Guatemala, the first “safe” country they entered.
In its injunction, the court said that any such agreement would have to be approved by Guatemala’s Congress first, effectively tying President Morales’s hands.
Designating Guatemala as a “safe third country” has met with stiff opposition in the Central American nation with both of the candidates for president in the upcoming election rejecting it.
While Guatemalans say they fear becoming a “dumping ground” for migrants, human rights groups have pointed to Guatemala’s high levels of crime as a reason for it not qualifying as a suitable “safe third country”.
On Sunday, the government issued a statement denying it had any plans to sign such a deal.
Only last month, Interior Minister Enrique Degenhart said Guatemalan officials were discussing such a “safe third country” agreement with the US – with US sources confirming such a deal was under discussion.
It is not clear whether the planned meeting between Mr Morales and President Donald Trump will take place anytime soon now that the deal is off the table.
Guatemala, as well as its southern neighbours, El Salvador and Honduras, have all been struggling to curb the flow of people leaving for the US.
The case of a Salvadorean migrant who drowned alongside his daughter trying to cross the Rio Grande prompted Salvadorean President Nayib Bukele to say his country had to do more to fix the problems forcing people to leave.