Trump's threat came after Ankara repeatedly threatened a new cross-border operation against the Kurdish People's Protection Units (YPG), which have been working closely with the United States in Syria. US support for the YPG has been a major source of tension between the NATO allies, AFP reported.
"We have said repeatedly we are not scared of and will not be intimidated by any threats," Turkish Foreign Minister Mevlut Cavusoglu said, adding: "Economic threats against Turkey will get nowhere."
Trump on Sunday warned the US would "devastate Turkey economically if they hit Kurds".
While there have been tensions over American training of the YPG under the so-called Syrian Democratic Forces (SDF) alliance, there appeared to be some improvement on the issue after Trump said last month 2,000 American troops would withdraw from Syria.
Ankara welcomed the pullout decision after Turkish President Recep Tayyip Erdogan told Trump in a phone call that Turkey could finish off the last remnants of Daesh.
Trump had also pushed for the creation of a 30-kilometre (20-mile) "safe zone".
US Secretary of State Mike Pompeo on Monday said talks were under way on Washington's proposal to establish the zone in flashpoint border areas of northeastern Syria.
Cavusoglu earlier said that Turkey was "not against" a "security zone" in Syria, during a press conference in Ankara.
Turkey views the YPG as a "terrorist offshoot" of the outlawed Kurdistan Workers' Party (PKK), which has been waging an insurgency against the Turkish state since 1984.
The PKK is blacklisted as a terrorist organization by Ankara, the United States and the European Union.
Erdogan's spokesman Ibrahim Kalin said Ankara would "continue to fight against them all", referring to Daesh and the YPG.
Kalin added it was "a fatal mistake to equate Syrian Kurds with the PKK".
There has been growing friction between Turkey and the US over the fate of the YPG, especially after Pompeo this month said Washington would ensure Turkey would not "slaughter" Kurds.
And before a visit to Ankara last week, White House National Security adviser John Bolton said the US retreat was conditional on the safety of the Kurdish militants, provoking angry retorts from Turkish officials.
The threat of new sanctions hit the Turkish lira which weakened to reach 5.49 to the US dollar, a loss of nearly one percent in value on the day.
Washington previously hit Ankara with sanctions last August over the detention of an American pastor in Turkey, causing a dramatic fall in the lira's value.
But to Turkey's relief, the US sanctions were later lifted after Pastor Andrew Brunson was released by a Turkish court in October.
Turkey previously launched military offensives in northern Syria in 2016 and 2018 respectively against Daesh and the YPG. In early 2018, Syrian militants backed by Turkish military forces captured the YPG's northwestern enclave of Afrin.