The currency's value has fallen more than 40 per cent since the start of the year.
Relations between the two North Atlantic Treaty Organisation allies have sunk to their lowest point in decades over a number of issues including the detention of U.S. pastor Andrew Brunson on terror-related charges, prompting the Turkish lira to hit record lows against the dollar.
In a tweet, Trump announced the doubling of the tariffs in new punitive actions against Turkey, saying: "Our relations with Turkey are not good at this time!" The lira, he noted on Twitter, "slides rapidly downward against our very strong Dollar!" US President Donald Trump referred to the plunging lira in a tweet.
Trump last month threatened to slap "large sanctions" on Turkey if it did not release American pastor Andrew Brunson, who faces charges of espionage for allegedly supporting a failed coup attempt in 2016. A delegation of Turkish officials held talks with their counterparts in Washington this week but there was no sign of a breakthrough.
On Friday, Turkey's currency, the Lira, fell as much as 14%, causing the global financial markets to shudder.
In what appears to be a diplomatic riposte, Turkey later said Erdoğan had held a phone call with Russian president Vladimir Putin to discuss economic ties, suggesting it might gravitate further away from its North Atlantic Treaty Organisation allies toward cooperation with Russia, whose relations with the west are at their lowest since the cold war.
Erdoğan attempted to downplay economic concerns by telling Turks "not to worry", telling supporters they were in an "economic war" and to convert their dollars and "gold under the pillow" into lira. "This is a national, domestic battle", he told a crowd in the northeastern city of Bayburt.
Turkey wants the U.S. to extradite cleric Fethullah Gulen, a Pennsylvania-based cleric who Turkish authorities say masterminded the coup attempt in which 250 people were killed.
That is unlikely to mollify investors who are also anxious by the growing dispute with the United States.
Earlier, Erdogan had stood by his opposition to high interest rates, saying they were an instrument of exploitation and that Turkey was not going to fall into this trap.
"First of all, confidence needs to be regained". In response, the currency renewed its sell-off.
By Saturday, the lira was trading at 6.43 to the dollar.
In modern economies, central banks are meant to be independent of governments to make sure they set policies that are best for the economy, not politicians.
Presenting the government's new economic model, he said the next steps of rebalancing would entail lowering the current account deficit and improving trust. "Aluminum will now be 20% and steel 50%". "Albayrak's plan was uninspiring at best".
Turkish officials insist the outcome of Brunson's case exclusively relies on the judiciary, a claim the United States has refused to buy in the light of Erdogan's earlier suggestions to swap him with Turkish opposition exiles residing in the US.