The lira dropped by over 11 percent in value in one day on Friday morning to almost six lira per dollar.
Reverberations spread through global financial markets, with European stock markets especially hit as investors took fright over banks' exposure to Turkey.
The penalties also bar any U.S. transactions with the two men.
The currency is currently down 13.5% against the USA dollar, after a brief 20% fall, resulting from a Trump tweet that declared, "Aluminum will now be 20% and Steel 50%", and concluded: "Our relations with Turkey are not good at this time!". What possible reason could there be behind the lira which was at 2.8 against dollar in July 15, 2016 to slide below 6 yesterday?
"Before it is too late, Washington must give up the misguided notion that our relationship can be asymmetrical and come to terms with the fact that Turkey has alternatives", he said. While many of Turkey's challenges are specific to that country, there are certain characteristics - a heavy debt load following a prolonged, low USA interest-rate driven borrowing binge in dollars - broadly shared throughout emerging markets. Financial upheaval risks further destabilizing an already volatile region.
President Trump's announcement Friday morning that he has authorized the doubling of tariffs on steel and aluminum imports coming from Turkey came in a tweet that noted, "Our relations with Turkey are not good at this time!".
In a tweet on Friday, Foreign Ministry Spokesman Hami Aksoy said President Donald Trump's decision, which also violates the rules of World Trade Organization, "cannot be associated with seriousness expected from a state".
The Treasury Department slapped sanctions on two Turkish officials last week because the country refused to release American pastor Andrew Brunson, who faces charges in Turkey that include attempting to overthrow the government and espionage.
He appeared to blame foreigners for trying to hurt Turkey, saying: "This will be my people's response against those waging an economic war against us".
This is a very bad rationale for hiking tariffs on a country's exports.
In June, the U.S. Senate passed a bill prohibiting Turkey from buying F-35 fighter jets because of Brunson's imprisonment and Turkey's purchase of Russia's S-400 air defense system. "During this period, Turkey has set records in its exports, production and employment", Erdogan said.
The latest tariffs stem from the trade fight Trump launched earlier this year with several countries, including Turkey, according to the Washington Post. "You prefer a pastor to a strategic ally of yours in North Atlantic Treaty Organisation". Shame on you, shame on you.