On Friday, the Turkish Lira snapped a three-day rebound, sliding more than 5 percent against the dollar on worries about the threat of more USA economic sanctions unless Turkey hands over detained American evangelical pastor Andrew Brunson.
"We've already responded based on the World Trade Organisation rules and will continue to do so", state-run Anadolu news agency quoted him as saying.
A decree by Mr Erdogan doubled Turkish tariffs on imports of U.S. passenger cars to 120 per cent, alcoholic drinks to 140 per cent and leaf tobacco to 60 per cent. Tariffs were also doubled on goods such as cosmetics, rice and coal.
On August 11, Trump said he had doubled import tariffs on Turkish steel and aluminum, sending the Turkish lira into a tailspin and prompting Ankara to impose countersanctions on some USA products including rice, vehicles, alcohol, coal, and cosmetics.
"The heightened tensions between the United States and Turkey caused the Turkish lira to take a leg lower and this reignited fears that the European banking system could be shaken by either defaults or non-performing loans from Turkey", said market analyst David Madden at CMC Markets UK.
Brunson's detention since October 2016 on terror-related charges has soured relations between the two North Atlantic Treaty Organisation allies and sent the lira tumbling. Washington has introduced sanctions against members of the Turkish government, citing the case and insisting that the pastor is innocent.
China said that a delegation led by its vice commerce minister would travel to the United States for talks on August 21 and 22, raising hopes that Beijing and Washington may resolve the escalating tariff war that has roiled financial markets since early March. Mr Erdogan said: "Today some people are trying to threaten us through the economy, through interest rates, foreign exchange, investment and inflation".
Turkish courts have rejected several appeals for Brunson to be freed and allowed to leave Turkey.
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If convicted, the American pastor faces up to 35 years in jail.
Trump later tweeted that the U.S. "will pay nothing" for the release "but we are cutting back on Turkey!".
The Australian dollar rose 0.1 percent to $0.7266, gaining for a second day, although momentum was lost after Reserve Bank of Australia (RBA) Governor Philip Lowe said interest rates would stay at record lows "for a while yet".
Brunson, who has been living in Turkey for more than two decades, was accused of helping supporters of the US -based Fethullah Gülen who Turkish authorities say masterminded the 2016 coup attempt in which 250 people were killed.
Meanwhile, Turkish courts have moved to defuse other legal cases that have irritated relations with the EU. "That's politics", he said.
But he suggested that Turkish "policymakers only really seem to have done the minimum needed".
Memories of past emerging market crises, such as the Asian financial turmoil of 1997 and Turkey's 2001 crisis, came back to haunt investors this week and prompted a wave of selling across emerging market assets as a whole.
He went to the police station on October 7, 2016, was detained and later charged with involvement in a coup attempt.