Donald Trump has threatened to do "some financially very strong things to Turkey" if they continue on their assault against Kurdish forces in northern Syria.
The US president told reporters outside The White House: "We've won, we beat ISIS and we beat them badly and decisively, we have no soldiers."
He added: "I don't think the American people want to see us go back into that area with out military or go back into that area again."
"Let's see what happens, we are possibly going to do something very, very tough with respect to sanctions and other financial things," Trump added.
His comments come just days after pulling American troops from their positions near the border alongside their Kurdish allies.
Trump also told reporters that the US had two options, to defeat everyone or to try and mediate the situation.
He said: "So you have the military and defeating everybody again or you have the choice of financially doing some very strong things to Turkey so that they take it a little bit easy on competition that I don't think is being fairly treated in many ways."
Trump continued: "We have a very good relationship with Kurds, or we can mediate, I hope we can mediate."
Turkey is continuing to pound Syrian regions with air strikes and an artillery bombardment that raised columns of black smoke in a border town and sent panicked civilians scrambling to get out.
Residents fled with their belongings loaded into cars, trucks and motorcycle rickshaws, while others escaped on foot.
The UN refugee agency said tens of thousands of people are on the move, and aid agencies have warned nearly 500,000 people near the border are at risk.
The opening barrage showed little sign of holding back. The Turkish Defence Military said its jets and artillery have struck 181 targets so far.
More than a dozen columns of thick smoke rose in and around the town of Tel Abyad, one of the offensive’s first main targets.
Turkish officials said the Kurdish militia had fired dozens of mortars into Turkish border towns over the past two days, including Akcakale, killing at least six civilians including a nine-month-old boy.
On the Syrian side, seven civilians and eight Kurdish fighters have been killed since the operation began, according to activists.