Mr Trump posted the threat on Twitter as the relationship between the two countries collapses amid the row over the release of America pastor Andrew Brunson, who has been charged with terrorism offences in Turkey.
Following the announcement, the lira firmed briefly to 5.8699 from 6.04 to the USA dollar, but later eased back to 6.0200 at 1538 GMT.
Turkey on Friday threatened to respond if the United States levied further sanctions over the detention of an American pastor, which has sparked a diplomatic standoff and battered the Turkish currency.
In a tweet on Thursday, Trump urged Brunson to serve as a "great patriot hostage" while he is jailed and criticized Turkey for "holding our wonderful Christian Pastor".
Trump later tweeted that the United States "will pay nothing" for the release "but we are cutting back on Turkey!".
"Even if tensions between the U.S. and Turkey are resolved, investors still need to see serious fiscal and monetary measures to restore confidence".
"We have stood together and will continue to do so", he said, making clear the high-level meeting was meant to communicate unequivocal support for Turkey at a critical juncture.
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"We have more that we're planning to do if they don't release him quickly", Mnuchin said when asked by President Trump at a Cabinet meeting for an update on USA sanctions on Turkish officials. But the White House does not plan to lift the metals tariffs, which Sanders said were a national security issue.
Turkey's biggest mobile phone importing companies have cancelled their iPhone orders as Turkish citizens join a move to boycott U.S. products. He demanded Brunson's release, saying "they can't take our people".
"But one could hardly say the same about Turkey's announced tariffs on American cars, alcohol, and tobacco. This is very easy to resolve", the administration official said.
USA and Turkey relations have been souring, after President Trump doubled tariffs on Turkish steel and aluminum in response to his continued imprisonment.
The lira lost strength after Mnuchin's remarks.