If the results of the investigation show an impact, it could lead to more tariffs on imported goods, an administration official told CNN.
The investigation could result in "everything from no action at all to the levying of supplemental duties," the official said.
"But whichever action we take would be informed by the results of the investigation and not by predetermined conclusions," the official added.
Axios first reported the potential executive order, saying it would target steel and aluminum imports and possibly household goods. The US steel industry largely blames China for a glut of steel on the global market that has driven down prices.
The Organization for Economic Cooperation and Development has reported that global crude steelmaking capacity more than doubled from 2000 to 2014, with global capacity growth led by an unprecedented expansion of production in China, the Office of the United States Trade Representative notes.
The USTR reported last year that steel imports increased by nearly 38 percent in 2014, although imports dropped in 2015. Meanwhile, the agency said, US steel exports have been decreasing steadily over the last several years, dropping by 17 percent between 2014 and 2015.
The New York Times reported last week that the Trump administration was looking to roll out its first measures against China on trade. The new initiative comes on the heels of a meetings between Trump and Chinese President Xi Jinping at the President's Mar-a-Lago resort, where trade and North Korea's efforts to develop nuclear weapons were at the top of the agenda.
The proposed executive order is Trump's latest attempt to follow through on his campaign pledge to go after other countries that take advantage of US trade policies.
In late March, the President signed two executive orders aimed at combating foreign trade abuses that contribute to the United States' half-trillion-dollar trade deficit.
Those orders initiate a large-scale review of the causes of the US trade deficits with some of America's largest trading partners and also require stricter enforcement of US anti-dumping laws to prevent foreign manufacturers from undercutting US companies by selling goods at unfair prices.
Vowing that the "theft of American prosperity will end," Trump said on March 31 that his administration "will take necessary and lawful action" to end trade abuses.