Sir Jeffrey said his party needs to see the legislation progressing through Parliament but added that he believes it has the potential to provide a solution to the Irish Sea border.
However, Sinn Fein renewed its attack on the controversial Bill, with vice president Michelle O’Neill warning it will cost jobs in Northern Ireland.
Foreign Secretary Liz Truss moved this week to publish legislation which would allow ministers to override large parts of the international deal struck over Northern Ireland’s post-Brexit trading arrangements.
The protocol requires regulatory checks and customs declarations on goods moving between Great Britain and Northern Ireland.
Unionists in Northern Ireland are vociferously opposed to the international treaty, claiming it has undermined the region’s place within the UK.
The DUP has blocked the formation of a new powersharing government at Stormont after last month’s Assembly election.
Speaking on College Green in Westminster, Sir Jeffrey said: “We haven’t completed our initial assessment of the legislation.
“We want to do that and then we’ll talk to the Government about where we go from here.”
We haven’t come to a view as to when the institutions might be restored. We want that to happen but we need to be sure that this Bill is moving forward
Sir Jeffrey Donaldson
He added: “There’s a long way to go with this legislation. It will take months to pass through the Commons and the Lords unless the Government decides to escalate the timetable for the Bill, and we haven’t heard that.
“So we will consider what happens in the legislative process, but at this stage we haven’t come to a view as to when the institutions might be restored.
“We want that to happen but we need to be sure that this Bill is moving forward, and that this Bill will be enacted.
“That is fundamentally important for us. A solution can only work once the legislation is in place.
“We believe it has the potential to provide a solution on the difficulties created by the protocol.”
Ms O’Neill said the legislation would create economic uncertainty.
During a visit to a factory in Co Tyrone, she said: “The reality is that the actions of Boris Johnson, the actions to unilaterally disapply parts of the protocol, will have a negative impact on businesses like this.
“It creates more uncertainty so that is not in the best interests of the people here, it is certainly not in the best interests of the business community here.
“There are ways to smooth the protocol but that needs to be done in an agreed fashion between the EU and the British Government.
“The Boris Johnson approach of running roughshod over the protocol, undermining the protocol, undermining the Good Friday Agreement, undermining political stability, is just not acceptable and it is not the way to go.
“I think the EU have always been very pragmatic, they have understood more than the Tories in London the need to protect the Good Friday Agreement.
If you were a local company who wants to sell into the European market for the future, that investor will think twice because of the uncertainty here
“That pragmatism is what we need to see in terms of what needs to happen next. An agreed way forward is the only way forward.
“This approach of Boris Johnson is just reckless, it is dangerous and it creates even more economic uncertainty.
“If you were a local company who wants to sell into the European market for the future, that investor will think twice because of the uncertainty here.
“So Boris Johnson is jeopardising jobs here, all for what is going on within the Tory party. Boris Johnson and the Tories will never act in the interests of people here.”
Irish premier Micheal Martin said the legislation is “anti-business and anti-industry”.
“The fundamental issue is one of trust because the EU did enter an international agreement with the UK Government, which is now, essentially, being reneged upon,” Mr Martin added.
“A lot of European Union leaders are going to say, ‘How are we going to trust you again if we do a further deal? How do we know you will adhere to that deal?’
“That is a fundamental issue that now has to be overcome. I think the EU will uphold its side and also seek to press the full adherence to the agreement.
“Nobody wants to be in a situation where we end up in acrimony or real difficulty, but I am afraid the British Government’s decision to unilaterally press ahead with this legislation – which is ill-thought-out anyway, in terms of the detail of it – I think makes for very difficult times ahead.
“I don’t think it’s well-thought-out or well-thought-through and certainly doesn’t match the realities on the ground in terms of experiences of those involved in various industries.
“For example, those involved in manufacturing are doing particularly well under the protocol and they’re now very concerned, not just by the uncertainty that has been created, but also the fact that this represents an undermining of conditions.”