In return, Erdogan signed a decree to raise tariffs on USA imports including cars, alcohol and tobacco. "This is regrettable and a step in the wrong direction".
Washington imposed sanctions on two Turkish government ministers and doubled tariffs on Turkish steel and aluminum imports over the continued detention of an American pastor on espionage and terror-related charges.
The growing tensions between Washington and Ankara have sent the Turkish currency tumbling to historic lows.
Before he spoke, the lira strengthened more than 3 percent, despite signs that the dispute with the United States is as wide as ever.
Measures taken by Turkey's central bank also helped the lira rebound, such as cracking down on foreigners aiming to short the currency. "The fundamentals of the Turkish economy are robust and Turkey will emerge stronger from this process", Ibrahim Kalin wrote.More news: Imran Khan elected Pakistan PM, to take oath tomorrow
Erdogan has moved to shore up alliances in Europe and the Middle East, easing pressure on the battered lira, as the standoff with the US has deepened.
Whatever action the United States does take, economists said it looked likely to cause more pain for Turkish assets in the immediate future. Turkey's exports to the United States a year ago amounted to $8.7 billion, making it Turkey's fifth-largest export market.
"If they have the iPhone, there is Samsung", he said during a speech in Ankara earlier this week.
Last week, Washington doubled steel and aluminum tariffs on Turkey over its continued detention of the USA pastor Andrew Brunson. "We have more that we are planning to do if they don't release him quickly".
The Izmir Third High Criminal Court ruled against a new plea by Brunson's lawyer Ismail Cem Halavurt, who initiated the process after the Second High Criminal Court rejected an appeal for Brunson's release from house arrest and for his travel ban to be lifted on Wednesday.More news: Geoffrey Boycott slams 'brainless' and 'arrogant' India ahead of third England Test
World stocks rose on Friday as news of plans for U.S.
A senior USA official told CNN that in exchange for Turkey's release of Brunson, Israel agreed to release Ebru Ozkan, a 27-year-old Turkish woman held in Israel on suspicion of aiding Hamas, the Palestinian militant group that controls Gaza.
Optimism about better relations with the European Union after a Turkish court released two Greek soldiers pending trial and a banking watchdog's step to limit foreign exchange swap transactions have also helped the lira.
The Turkish lira was slightly lower on Friday after the USA warned Ankara should expect more sanctions over the detention of an American evangelical pastor.More news: Explosion in Yemen's Aden targets provincial governor's convoy