The micro-blogging site has used the new warning message for the first time after Trump shared a video of a black child running away from a white child with a fake CNN news logo on it.
The caption reads: "Terrified toddler runs from racist baby"
Trump branded CNN "fake news" in the clip.
It comes after Twitter hid another controversial Trump tweet, saying the post violated its rules about glorifying violence.
Speaking in reference to the recent riots in the US, Trump warned: "When the looting starts, the shooting starts."
But the message was hidden behind a warning that read: "Twitter has determined that it may be in the public's interest for the Tweet to remain accessible."
By contrast, Facebook decided against censoring the post.
Facebook boss Mark Zuckerberg subsequently admitted: "How to handle this post from the president has been very tough.
"It's been something that I've been struggling with basically all day, ever since I woke up ... This has been personally pretty wrenching for me."