Washington's move came during an ongoing dispute over Turkey's holding of an American pastor for two years.
The impact of the new tariffs on imported goods has prompted widespread selling in other emerging markets, sparking fears of a global crisis.
President Donald Trump said the United States was not going "to take it sitting down". "He's an innocent man".
A Turkish court has rejected an appeal for United States Christian pastor Andrew Brunson to be released from house arrest during his trial on terrorism charges.
Turkey has since imposed retaliatory tariffs on the U.S.
Why this tension between North Atlantic Treaty Organisation allies?
Investors are concerned that Turkey has amassed high levels of foreign debt to fuel growth in recent years.
Supporters of Brunson, who ran a small church in the Turkish coastal city of Izmir, say allegations that he was linked to Kurdish rebels as well as Turkish cleric and alleged coup plotter Fethullah Gulen are absurd. He later tweeted that the clergyman was a "great patriot" being held "hostage".
The Turkish lira was slightly lower on Friday after the U.S. warned Ankara should expect more sanctions over the detention of an American evangelical pastor. Its leader lives in Pennsylvania and the US has rejected calls from Turkey to have him extradited.
Turkey has sought to persuade the United States to spare Turkey's state-owned Halkbank from a threatened fine for allegedly helping Iran evade USA sanctions.
This, in turn, means that 41.09 million projected smartphone users in Turkey till a year ago out of which 7.15 million of them use iPhones.
Russia's Foreign Minister Sergei Lavrov visited Ankara on Tuesday, branding the USA sanctions "illegitimate".
It's an awkward triangle, given that Turkey is a Nato member, Russian Federation is Nato's number one threat and the organisation is obliged to defend any member that is attacked.
Erdogan has remained defiant, urging Turks to sell their gold and dollars for lira.
The currency had rebounded some 6 percent on Wednesday after the central bank squeezed lira liquidity in the market, effectively pushing up rates and supporting the currency.
South Africa's rand, Russia's rouble, the Indian rupee and Indonesia's rupiah have all taken a hit from the crisis in Turkey.