Reverberations spread through global markets, with European stock markets especially hit as investors took fright over banks' exposure to Turkey.
The reaction from global currency markets caused the euro to slump to a 13-month low and pushed the dollar to a one-year high.
Trump added that the Turkish currency Lira "slides rapidly downward against our very strong Dollar!"
"In that sense, the Turkey situation can be a contagion not only in Europe but across emerging markets", Anderson said. Financial upheaval risks further destabilising an already volatile region.
Erdogan said Turkey acted in accordance with the law, saying: "We have not made concessions on justice so far, and we will never make any".
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The new tariffs announced on Friday come as the United States increases pressure for the release of American pastor Andrew Brunson, who has been in Turkish custody since 2016 on charges of espionage.
Javad Zarif said there was no meeting planned with U.S. officials including his counterpart Mike Pompeo at the United Nations General Assembly, the semi-official news agency Tasnim reported on Saturday.
The dollar rose as exposure to Turkey could impact European banks and spark a domino effect throughout Europe as people begin to pull out of those banks and into the US, said Gregan Anderson, macroeconomic strategist at brokerage Bulltick LLC.
The lira sell-off has deepened worries particularly about whether over-indebted firms will be able to pay back loans taken out in euros and dollars after years of overseas borrowing to fund a construction boom, Reuters reported.
On Friday, Erdogan asked Turkish citizens to sell off their gold and dollars and exchange them for the lira, in an attempt to prop up the currency. "This is a domestic and national struggle". "Tariffs on another country", said Rodriguez Valladares. Speaking in the northeastern province of Gumushane, Erdogan said, "Apparently, those who believe they can force us to capitulate don't know [our] people at all".
In another opinion piece in the pro-government newspaper Daily Sabah, Mr Erdogan's spokesman, Mr Ibrahim Kalin, said Turkey's efforts to solve the crisis diplomatically had been dismissed by the Trump administration, warning Washington it might completely lose Ankara as an ally.
On Friday Turkey made it clear Mr Erdogan had spoken on the phone with Russian President Vladimir Putin after the latest U.S. tariffs, with the two men "expressing pleasure" that relations were progressing "positively".