"US diplomatic or official representation would treat these games as business as usual in the face of the PRC's egregious human rights abuses and atrocities in Xinjiang, and we simply can't do that," Psaki said, referring to the People's Republic of China.
China's embassy in Washington did not respond immediately to a request for comment.
The diplomatic boycott, which has been encouraged by some members of the US Congress for months, would not affect the attendance of American athletes, she said.
"The athletes on Team USA have our full support. We will be behind them 100 per cent as we cheer them on from home."
US announces diplomatic boycott of Beijing Winter Olympics
Earlier, Chinese foreign ministry spokesman Zhao Lijian told a news briefing those calling for a boycott are "grandstanding" and should stop "so as not to affect the dialogue and cooperation between China and the United States in important areas".
"If the US insists in wilfully clinging to its course, China will take resolute countermeasures," he said without elaborating.
The United States is next due to host an Olympics in 2028 in Los Angeles, raising the question of how China might respond in the interim.
Beijing says it opposes the politicisation of sports, but it has punished American sports leagues in the past, including the National Basketball Association, for running afoul of its political red lines.
Chinese officials point out that they have received more than 1,500 applications from the US Olympic Committee, which is responsible for submitting names of US athletes to attend the Winter Games, set for February.
Nonetheless, they cite strict COVID-19 restrictions for plans to limit spectator attendance, and Chinese state media have said Beijing does not intend to invite Western politicians who have threatened a boycott.
Russian President Vladimir Putin is the only leader of a major country who has accepted China's invitation to attend the Winter Olympics.
Secretary of State Antony Blinken has said the United States has been consulting with allies and partners on a "shared approach" to the Beijing Games in light of their concerns about China's human rights record. read more
Stefano Sannino, chief of the European Union's diplomatic service, said on Friday after meetings with US officials in Washington that it was important to keep up pressure on China over abuses in Xinjiang, but that any boycott was in the domain of individual members states, not common EU foreign policy.