Asked about the allegations at a photo-op with the group Bikers for Trump on Saturday in Bedminster, New Jersey, the president said: "Lowlife".
The accusations are among a long list of scandalous claims contained in her new book, "Unhinged", set to come out August 14.
In excerpts from the book entitled Unhinged, which were first reported by the Guardian, Manigault Newman claimed the president had used the "N-word" repeatedly, and also used racial slurs to refer to George Conway, the half-Filipino husband of the top White House aide Kellyanne Conway.
Manigault Newman's book also alleges how Trump made a farcical effort to sell copies of his book Trump: The Art Of The Deal at his inauguration as President in January a year ago. Her book also describes him as scattered, self-absorbed, misogynistic and insecure.
Many across social media are giving Omarosa Manigault Newman the virtual side-eye over her seemingly contradictory statements about Donald Trump's use of the N-word. He responded: "Lowlife. She's a lowlife".
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Manigault Newman went on to become Assistant to the President and Director of Communications for the Office of Public Liaison. While she doesn't provide direct evidence, she cites three unnamed sources who attest to the existence of the tape.
The White House has already slammed it as "riddled with lies and false accusations". She also claims she refused hush money from Trump's campaign to stay silent after she left the White House, according to The Washington Post.
She said: 'I was told exactly what Donald Trump said - yes, the N-word and others in a classic Trump-goes-nuclear rant - and when he's said them.