But he said the "strong but necessary" restrictions would not apply to the UK, where 460 cases of the virus have now been confirmed.
There are 1135 confirmed cases of the virus across the US, with 38 deaths.
"To keep new cases from entering our shores, we will be suspending all travel from Europe to the United States for the next 30 days," Trump said.
"The new rules will go into effect Friday at midnight," he added.
"We are marshalling the full power of the federal government and the private sector to protect the American people," he said.
"This is the most aggressive and comprehensive effort to confront a foreign virus in modern history," he said.
Trump, whose re-election bid on 3 November could hinge on how well he responds to the crisis, stopped short of declaring a national emergency.
But he pulled no punches in saying Europe was partly to blame for the virus's spread in the United States. His travel restrictions on Europe were similar to what he declared on travel from China when the illness was spreading wildly there.
"The European Union failed to take the same precautions and restrict travel from China and other hot spots. As a result, a large number of new clusters in the United States were seeded by travellers from Europe," he said.
As the US stock market took another hit from the virus on Wednesday, Trump said he would take emergency action to provide financial relief for workers who are ill, quarantined or caring for others due to the illness.
He said he was instructing the Treasury Department to defer tax payments without interest or penalties for certain businesses and individuals affected.
Trump added he was also instructing the Small Business Administration to provide capital and liquidity to firms affected by the virus.
He urged Congress to pass tax relief measures in an attempt to combat the effect of the outbreak on the US economy.
"I am calling on Congress to provide Americans with immediate payroll tax relief," he said.
Trump said the situation was not a financial crisis, but global shares crumbled after Trump's announcement. US S&P500 futures dropped more than 3 percent, a day after the S&P 500 lost 4.89 percent, putting the index in bear market territory, defined as a 20 percent fall from a recent top.
Euro Stoxx 50 futures dived more than 5 percent to their lowest levels since mid-2016. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 2 percent to its lowest level since early 2019, while Japan's Nikkei lost 3.3 percent.