Turkey's state-run news agency says a higher Turkish court has also rejected an appeal for the release from detention of an American pastor who is at the center of a Turkish-U.S. spat.
Turkey, meanwhile, is frustrated by the refusal of the U.S.to extradite a Pennsylvania-based Muslim cleric accused by Turkish authorities of engineering the coup attempt.
The leader of Turkey's main opposition party said Erdogan was using the standoff over the evangelical pastor as a "pretext", blaming the United States for economic problems and diverting attention from his own alleged mismanagement.
President Donald Trump and Secretary of State Mike Pompeo have repeatedly called for his release, while Erdogan has said the USA should respect Turkey's judicial process.
U.S. President Donald Trump's administration on Thursday signaled new sanctions against Turkey over Brunson's detention and Turkey said it would reciprocate.
The White House called the Turkish response a step in the wrong direction and signalled a hard line on Brunson's release.
It said: "The downgrade reflects our expectation that the extreme volatility of the Turkish lira and the resulting projected sharp balance of payments adjustment will undermine Turkey's economy".
A decree by Mr Erdogan doubled Turkish tariffs on imports of United States 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.More news: Global Stocks Drop Amid Concerns About Turkey
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Now, they are threatening further action if Pastor Andrew Brunson is not released from House arrest.
The United States has already imposed sanctions on two Turkish government ministers and doubled tariffs on Turkish steel and aluminum imports.
It estimates Turkey's short-term external debt at $180 billion and total external debt at $460 billion - the highest in emerging markets.
The Canadian dollar strengthened against its USA counterpart after data showing a surge in domestic inflation triggered increased bets on another Bank of Canada interest rate hike as soon as September.
Ebbing concerns over the fallout from the Turkish lira's recent slide also helped strengthen the euro against the dollar. Turkey's dollar bonds fell, while the cost of insuring exposure to Turkish debt rose.
Erdogan wants Washington to extradite Turkish cleric Fethullah Gulen (the public face of the Central Intelligence Agency in Turkey), whom the Turkish president views as a longtime antagonist and mastermind of the plot to oust him. He criticized Turkey for "holding our wonderful Christian Pastor".
According to the Middle East Eye, officials in Ankara are willing to concede to USA demands for the freedom of Andrew Brunson, an evangelical preacher accused of playing a role in the attempted coup there in 2016.
Turkey has been pushing back against U.S. pressure, insisting that it will determine its own economic policies and choose its own trade partners.
The fight between Turkey and the US has escalated in recent weeks, with Brunson's detainment as a flashpoint.