After Mr Trump tweeted the video late on Thursday, Twitter took the rare step of adding a warning that it was "manipulated media" and linked to a page which said multiple journalists confirmed the clip was edited to make it look like a CNN broadcast.
The video, originally posted by a Trump superfan, maintained that "America is not the problem", suggesting that incidents of racism were being manufactured to cause outrage.
Trump posted altered video of a "CNN" segment, featuring two toddlers who went viral past year, to suggest that racist incidents were being manufactured by the news media.
The video, created by pro-Trump satirist Carpe Donktum, begins with dramatic music showing a black toddler running away from a white toddler with a "breaking news" graphic that reads "Terrified toddler runs away from racist baby" with the CNN logo next to it.
By Friday, the tweeted video had more than 14.8 million views and 180,000 retweets.
It's probably fair to say Donald Trump has a love-hate relationship with Twitter. The video was shared on Facebook by one of the toddlers' fathers, who said, "With all the racism and hate going on I just think it's a really lovely video".
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CNN's official handle responded to Trump's tweet saying they reported the incident "exactly as it happened" and criticised the U.S. president for using innocent children to attack the press.
Many on Twitter were angered by the post and criticised Trump.
Michael Cisneros, the father of one of the boys in the video, said past year he had posted the original video to social media because he thought it was a attractive, candid moment to share in the midst of racism and hate in the world. "Fake news is. If you see something, say something. In addition, we may label Tweets containing synthetic and manipulated media to help people understand their authenticity and to provide additional context".
However, the tech giant did remove campaign adverts by Mr Trump and vice president Mike Pence that featured an upside-down red triangle - a Nazis symbol used to designate political prisoners in concentration camps.
Twitter twice flagged Trump tweets over the past month, enraging the President and his supporters and even prompting the President to sign an executive order targeting social media companies.