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!".
Germany's exporter-heavy DAX .GDAXI index fell 2 percent, underperforming the broader market, while Milan was the hardest-hit major European index and lost 2.5 percent, its lowest level since July a year ago.
In response, President Trump tweeted in July, "The United States will impose large sanctions on Turkey for their longtime detainment of Pastor Andrew Brunson, a great Christian, family man and wonderful human being".
Turkey is now under a 25 percent tariff on imported steel and 10 percent on aluminum, which went into effect in March.
"Those who have dollars, euros or gold under their pillows should go and exchange them into [Turkish] lira".
Turkey's Foreign Ministry responded, saying "President Trump's decision on imposing additional tariffs targeting our country's steel and aluminum exports, in complete disregard of World Trade Organization rules, can not be associated with seriousness expected from a state".
The lira has been under sustained pressure on foreign exchanges, dropping by nearly 50% against the dollar in the past 12 months.
Earlier this week, a Turkish delegation returned from Washington with no movement on the detention of American pastor Andrew Brunson, who is under house arrest in Turkey over terrorism charges.
U.S. To Impose New Sanctions On Russia For Nerve Agent Attacks
The new USA sanctions would cover sensitive national-security controlled goods, a senior State Department official told reporters. Skripal and his daughter were poisoned by the military-grade nerve agent in the British town of Salisbury in March.
Chelsea, Real Madrid agree to Thibaut Courtois deal
Thibaut Courtois has been reminded of a time when he hurled taunts at Real Madrid fans, by their local rivals, Atletico Madrid . This would be the second time it has been broken during this window after Liverpool won the race to sign Allison from Roma.
Matthew Seiyefa Takes Over as Ag. DG DSS
According to him, the unlawful act which was done without the knowledge of the presidency is completely unacceptable. Daura has been directed to hand over to the most senior officer of the State Security Service until further notice.
Turkey's woes also shook world markets, pushing down stock indexes.
Jay Sekulow, an attorney for Trump who is also representing Brunson's family, told talk-show host and political commentator Sean Hannity's radio programme on Friday: "We're close to getting a resolution in that case".
Erdogan urged Washington to give up the misguided notion that bilateral relations could be "asymmetrical" and realise that Turkey had alternatives "before it is too late". The predictable result is this has made inflation get out of control - it is up to 15.9 percent when they are supposedly trying to keep it to 5 percent - because the central bank has been so slow to raise rates, and, in fact, refused to do so at its most recent meeting.
Meanwhile, investors are anxious about the economic policies of President Recep Tayyip Erdogan, who won a new term in office in June with sweeping new powers.
The lira, which has lost a third of its value this year, fell on his comments and was trading at around 6.05 to the dollar after he spoke, almost 9 percent weaker on the day. His comments suggest that the Turkish central bank does not act with full independence, CNBC reported on Friday.
Turkey's sovereign dollar-denominated bonds tumbled with many issues trading at record lows.
Erdogan added that Washington had always "failed to understand and respect the Turkish people's concerns". It is obvious how it will be done: "since the final decision-maker of all policies in the new regime is the president, the responsibility of regaining confidence is on his shoulders", said Seyfettin Gursel, a professor at Turkey's Bahcesehir University.
However, these new sanctions may have a reverse effect, and could end up being more beneficial to Russian Federation. "If they have their dollar, we have the people, we have Allah".
Albayrak, who formerly served as energy minister, on Friday announced what he has described as a "new economic model" for Turkey but he focused on macro-economic issues and steered well clear of tackling the currency crisis.