Mr Trump said tariffs on aluminium imports would be increased to 20% and the tariff on steel imports will be raised to 50% as the Turkish Lira "slides rapidly downward against our very strong Dollar!".
The Turkish lira has fallen more than 10 percent since last week when the United States slapped sanctions on two Turkish ministers. It's down 40 percent this year against the dollar. The weakened currency's value has helped increase inflation and anxious worldwide investors.
Erdogan's "tight grip" on the central bank and the fact "higher interest rates do no fit with Turkey's economic growth strategy" meant that the central bank has kept interest rates on hold, Nora Neuteboom, economist at ABN Amro, told AFP.
"This will be the response to those who have declared an economic war", he said, blaming Turkey's woes on what he described as an "interest rate lobby" seeking to push the country to higher rates.
Although Erdogan struck a defiant tone, his foreign ministry called for diplomacy and dialogue to solve problems with Washington and Trade Minister Ruhsar Pekcan said "we implore President Trump to return to the negotiating table".
Waves from the crisis spread overseas, with investors selling off shares in European banks with large exposure to the Turkish economy.
Meanwhile, markets are deeply concerned over the direction of economic policy under President Recep Tayyip Erdogan, with inflation at almost 16%, but the central bank reluctant to raise rates in response.
The central bank raised interest rates to support the lira in an emergency move in May, but it did not tighten at its last meeting.
TRY stays sceptic on Erdogan's nationalist tone. "They are bullets, cannonballs and missiles of an economic war waged against our country", he said.More news: Everton seal sensational Bernard, Yerry Mina and Andre Gomes triple swoop
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"Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks".
"We are gearing up for trade in national currencies with China, Russia, Iran, Ukraine, which account for the largest bilateral trade volume".
President Trump's announcement Friday morning that he has authorized the doubling of tariffs on steel and aluminum imports coming from Turkey came in a tweet that noted, "Our relations with Turkey are not good at this time!". "It just shows the importance of the evangelical vote in the U.S.as it heads to midterms".
So, to hike tariffs on Turkey, Trump needed a reason why maintaining America's domestic metal industry required imposing even steeper tariffs on Turkish exports than were already in place.
Turkey has accused Andrew Craig Brunson of spying and "committing crimes on behalf of terror groups without being a member". He still faces a sentence of up to 35 years if he is convicted at his ongoing trial.
After nearly 20 months in a Turkish jail, a court moved Brunson was moved to house arrest in July. The White House thought that Turkey had agreed to release the pastor in exchange for Israel's release of a Turkish woman that had allegedly given funding to Hamas.
Marcus Chenevix, Middle East analyst at TS Lombard said that Turkey's economy is fragile. He added that the country will continue to enjoy good economic relations with several major nations. It has stepped up sanctions against countries such as North Korea, Iran and Russian Federation, among others.
Bryan Lynn wrote this story for VOA Learning English, based on reports from Reuters, the Associated Press and Agence France-Presse.