The Department of Transportation said it is punishing Beijing for refusing to let US airlines resume flights to China as its pandemic subsides.
In recent weeks the countries have sparred over coronavirus and China's policies in Hong Kong.
But Washington said it would continue to "engage" on the air travel issue.
The Department of Transportation order applies to four airlines - Air China, China Eastern Airlines, China Southern Airlines and Hainan Airlines - which have continued to fly between the two countries during the pandemic, although at reduced levels.
It needs final approval from US President Donald Trump, who has repeatedly accused China of engaging in unfair trade, and in recent weeks criticised its handling of coronavirus and protests in Hong Kong.
Beijing in March said domestic and foreign airlines could operate no more than one weekly flight between China and any given country, adding that carriers could not exceed the level of service they were offering on 12 March.
If the order goes forward, it will hurt travel, trade and other exchange between the two countries, said Daniel Kliman, director of the Asia-Pacific Security Program at the Center for a New American Security.
But that breakdown was already under way, he added.
"We're already seeing de-coupling of the United States and China," he said, pointing to US efforts to restrict technology sales and the US-China trade war. "It's an acceleration of a trend that has really been building up."
The US China Business Council, which represents 200 big US companies that do business in China, said: "Commercial air travel provides a vital bridge between the US and China. Prior to the pandemic, millions of travellers crossed the ocean each year to conduct business, enjoy holidays, study and, most important, learn about the other through direct experience.
"This travel is especially important during times of conflict, suspicion and misunderstanding. We call on the governments of both countries to get the airplanes flying again - in both directions."
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