That is spreading fear of an impact on other economies and markets - bank shares across the continent fell and the euro slipped to its lowest since July 2017 as the Financial Times quoted sources as saying the European Central Bank was concerned about European banks' exposure to Turkey.
He did not offer an explanation for the tariff hike, which raises the tariffs to 20 percent on aluminum and 50 percent on steel, though there are a couple of possibilities.
He added: "Relations with countries who behave like this have reached a point beyond salvaging".
Exacerbating the problems: a diplomatic standoff with the United States over the fate of a captive American missionary who Turkey has accused of espionage. Washington slapped tariffs of 25 percent on steel and 10 percent on aluminum in March for imports from several countries, including Turkey.
President Donald Trump announced that the US has doubled aluminium and steel import tariffs on Turkey, fixing them at 20 percent and 50 percent respectively.
Erdogan, who says a shadowy "interest rate lobby" and Western credit ratings agencies are attempting to undermine Turkey's economy, said Turks should exchange their gold and dollars into lira to help the currency.
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"There is zero credibility in the Central Bank of Turkey and zero credibility in Turkish policy making".
The diplomatic tension and the failure of Turkish officials to persuade the U.S. to lift the sanctions plunged the lira to new lows this week.
Earlier this week USA and Turkish officials met in Washington to discuss issues that have pitted the two North Atlantic Treaty Organisation allies against each other.
President TrumpDonald John TrumpKobach agrees to recuse himself from vote counting in Kansas GOP primary NFL players kneel during national anthem before first preseason game Schiff blasts GOP for Russian Federation probe conduct: "That's how you obstruct an investigation, not how you conduct one" MORE said Friday that the USA will also double tariffs on steel and aluminum imported from Turkey as relations between the North Atlantic Treaty Organisation allies worsen.
"I would say we would define progress as Pastor Brunson being brought home", Nauert said. "While they have dollars, we have our people, law and Allah", the Turkish leader said addressing citizens in the Black Sea city of Rize. "It is a national fight", he said.
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.
The lira briefly fell as much as 14.6 percent - its biggest one-day drop since early 2001 - before paring losses. As the currency drops, Turkish companies and households with debt in foreign currencies see their debts expand.