Human Rights First, which is based in New York City, said Friday it was "simply ludicrous" for Washington to assert that Guatemala was capable of protecting refugees from Honduras and El Salvador, when its own citizens are fleeing violence.
"The Trump administration is doubling down on its efforts to block, bar and punish refugees for attempting to seek asylum in the United States," said Eleanor Acer, senior director for refugee protection at Human Rights First.
"These policies put the lives of refugees in great danger."
Trump has made curbing illegal immigration to the US a priority issue and has blamed Mexico for the problem.
Guatemala, one of the poorest countries in Latin America, has little experience receiving large numbers of asylum seekers and a large wave of refugees would strain limited resources.
Guatemala, like its neighbors El Salvador and Honduras, suffers high levels of violence, driven largely by gangs including MS-13, which operates in all three countries.
Many asylum seekers from Central America cite fear from gang violence as the reason they come to the United States for refuge.
About 300,000 undocumented families from Guatemala, El Salvador and Honduras have crossed through Mexico and reached the US border in the past year, according to US Customs and Border Protection.
Trump has threatened tariffs on Mexican goods unless it curbs illegal immigration through its territory.
On Friday, the tariffs were called off, after the United States and Mexico announced an agreement on immigration. But Trump renewed the threat of tariffs on Monday, saying they would be reimposed if Mexico's Congress did not approve the immigration deal.