"We are not activating the sanctions," Mnuchin said. "These are very powerful sanctions. We hope we don't have to use them, but we could shut down the Turkish economy if we need to."
News of the potential sanctions, which could be used to target any part of the Turkish government or any person associated with it, fell flat. In a flurry of bipartisan criticism, some lawmakers said "conditional sanctions" were insufficient, while others charged the move was an attempt to stymie Congress.
Senators and former officials pointed out that Ankara already appears to have blasted through the administration's threshold for triggering penalties on multiple fronts, from attacks on civilians to undermining counterterrorism operations in northeastern Syria.
Some senators questioned Trump's seeming reluctance to sanction Turkey and raised an eyebrow at his administration's decision to team up with Russia on Thursday to oppose a UN Security Council resolution by European countries condemning Turkey's actions.
Trump, who has a well-established affinity for authoritarian leaders, has invited Turkish President Recep Tayyip Erdogan to the White House in November.
"President Trump gave Turkey the green light to attack the Syrian Kurds the moment he agreed to Erdogan's request to move American Special Forces away from key Kurdish-controlled areas," said Democratic Sen. Chris Van Hollen of Maryland.
"The idea that the Administration is now going to sanction Turkey to protect the Kurdish people rings totally hollow," Van Hollen said. "This is nothing but an effort to stop the Congress from taking action to try to prevent further loss of life and get a Turkish withdrawal."
Republican lawmakers in particular have harshly denounced Trump's decision as a betrayal of the Kurds and a strategic blunder that will weaken American credibility, reverse gains against ISIS, make it harder for the US to build alliances and give a boost to Russia, China and Iran.
Sen. Lindsey Graham, a South Carolina Republican, issued a statement Friday saying that "conditional sanctions aren't appropriate for the threat we face. When it comes to dealing with Erdogan and protecting our Kurdish allies, the Trump Administration needs to up their game." Otherwise, Graham said, "the conditional sanctions ... will be viewed by Turkey as a tepid response and will embolden Erdogan even more."
Graham was among those who pointed to abuses that surpassed the administration's benchmark for levying penalties against Turkey.
The Treasury statement had said that Trump's threat of sanctions was meant to dissuade Turkey from actions that included "the indiscriminate targeting of civilians, targeting of civilian infrastructure, targeting of ethnic or religious minorities."
Graham pointed to the fact that Turkey is clearly engaged in targeting ethnic minorities, as the point of its attack on Kurds in northeastern Syria is to target Kurds. "We are witnessing ethnic cleansing in Syria by Turkey, the destruction of a reliable ally in the Kurds, and the reemergence of ISIS," he said.
On Thursday, a senior State Department official said the US would not stand for "inhumane" and "disproportionate" activity by the Turks, which would "include ethnic cleansing" and "indiscriminate artillery, air and other fires directed at civilian populations."
But a US official familiar with the situation on the ground said that on Thursday the US was "seeing reports of civilian casualties from what looks like indiscriminate bombing of dense population centers. Tragic imagery of what are clearly civilian men, women and children."
Mnuchin told reporters that Trump is "concerned" about the Turkish military offensive in Syria and the potential of targeting civilians and civilian infrastructure.
Brett McGurk, Trump's former presidential envoy to the Global Coalition against ISIL, took to Twitter to note that Mnuchin had "briefed from the WH podium that Trump signed an authorization to impose sanctions, but that no sanctions have been imposed. This is meaningless nonsense. 100k people are already displaced and US soldiers are being fired upon. What's the bar for sanctions?"
Treasury also said Friday that if Turkey undermined "the continued counterterrorism activities of the Syrian Democratic Forces" that would be another trigger for sanctions. Mnuchin said Trump wants to make it clear that "it is imperative that Turkey not allow a single ISIS fighter to escape."
But the Syrian Democratic Forces had already announced the suspension of ISIS operations earlier this week. And on Friday, the group reported that five ISIS members had escaped from a prison after Turkish mortar rounds landed nearby.
Congress has "been waiting months for Secretary Mnuchin to levy sanctions passed by Congress in response to Turkey's decision to purchase and take delivery of the Russian S-400 missile defense system, which puts it at odds with its NATO allies," the Maryland Democrat said.
"President Trump should immediately reverse his decision to withdraw the small number of Special Forces supporting the Syrian Kurds in the fight against ISIS," said Van Hollen, who has worked with Graham to write legislation sanctioning the Turks for their military operation in Syria. "I'm continuing to work on bipartisan legislation to immediately apply tough sanctions against Turkey until it ends its aggression and withdraws."
CLARIFICATION: This story has been updated to more precisely describe the Trump administration's stance on the UN Security Council's resolution.
CNN's Betsy Klein, Maegan Vazquez, Kaitlan Collins, Kylie Atwood, Kevin Liptak, Jennifer Hansler and Ryan Browne contributed to this report.