Earlier on Wednesday Canada announced it would also ground the aircraft, after satellite data suggested similarities between the flight profiles of the Ethiopian jet and a crash involving a Boeing aircraft in Indonesia past year.
Airlines have been notified that the Boeing Max aircraft are being taken out of circulation temporarily, and they are in agreement with the decision, Trump claimed.
Earlier this week, the US Federal Aviation Administration insisted that the planes were safe, despite growing concerns after the latest crash of the aircraft.
"We are supporting this proactive step out of an abundance of caution", Boeing said following Trump's announcement.
Eyewitnesses say they saw a trail of smoke, sparks and debris as the plane nosedived.
However, two fatal crashes in five months have prompted intense scrutiny over the model's control systems.
Of the top 10 countries by air passenger travel, all but the United States and Japan have halted flights of the 737 MAX.
During Sunday's Ethiopian Airlines flight, the plane nosedived minutes after takeoff from Addis Ababa on an global flight to Nairobi, Kenya, witnesses said.
Passengers were mixed over President Donald Trump's decision to take them out of the skies.
The passengers came from more than 30 nations.
The initial crash of the Max 8 involved a Lion Air domestic flight in Indonesia on October 29, 2018.
"Our teams will make every effort to rebook customers as quickly as possible, and we apologize for any inconvenience", American Airlines said in a statement.
More than a dozen airlines as well as the governments of China, Indonesia, Australia, and Singapore have grounded the aircraft.
Shortly after, and possibly because, details of that telephone conversation surfaced, and with Canada bringing down the ban hammer, the FAA was allowed to ground 737 Maxes.
Boeing has issued a statement saying it is "deeply saddened" by the latest crash and will do what it can to help in the investigation.
Resisting pressure, the U.S. Federal Aviation Administration's (FAA) acting administrator Dan Elwel said its review had shown "no systemic performance issues".
"There must be a rigorous investigation into why the aircraft, which has critical safety systems that did not exist on prior models, was certified without requiring additional pilot training", he said.
In November, two incidents were reported to the NASA-run Aviation Safety Reporting Database that involved problems in controlling the 737 MAX at low altitude just after take-off with autopilot engaged, according to documents first published by the Dallas Morning News and verified by Reuters.