It freezes North Korean government property in America and bans US exports to, or investment in, North Korea.
The order also greatly expands powers to blacklist anyone, including non-Americans, dealing with North Korea.
The 6 January nuclear test and 7 February satellite launch were violations of existing UN sanctions.
President Obama‘s order includes measures from the recently agreed UN Security Council sanctions – the toughest sanctions in decades against North Korea.
But it also contains separate sanctions passed by Congress and enacted by the president in February.
White House spokesman Josh Earnest said: “The US and the global community will not tolerate North Korea’s illicit nuclear and ballistic missile activities, and we will continue to impose costs on North Korea until it comes into compliance with its international obligations.”
Mr Obama said the sanctions “did not target the people of North Korea” but suggested that the country’s leadership only had itself to blame.
How much property North Korea has in the US is unknown, and trade between the two is tiny, but the expanded blacklist powers is a significant stepping up of the punitive measures available to Washington.
It is also the first time the US has had a blanket ban on trade, as it once had with Iran and Myanmar.
Amid the heightened tensions, the North sentenced an American student to 15 years hard labour on Wednesday for “severe crimes” against the state.
The US demanded North Korea immediately release Otto Warmbier, 21, who was arrested for trying to steal a propaganda sign from a hotel while on a visit in January.
The US and South Korea are also holding their annual military drills this month, which routinely generate tension, but this year North Korea threatened to launch a “pre-emptive nuclear strike of justice” against the US and South Korea.
Just like and share TWEET.NG for free updates.