Trump, in a series of tweets from Brussels, said that, "Presidents have been trying unsuccessfully for years to get Germany and other rich NATO Nations to pay more toward their protection from Russian Federation".
Merkel, speaking through an interpreter, said the meeting was an "opportunity to have an exchange about economic developments. and also the future of our trade relations".
Trump told NATO Secretary-General Jens Stoltenberg that Germany was wrong to support a new Baltic Sea pipeline to import Russian gas while being slow to meet targets for contributing to NATO defence spending meant to protect Europe from Russia.
In a pointed apparent reference to Mr Trump's upcoming meeting with Russian President Vladimir Putin, Mr Tusk noted that European military spending "is an investment in our security, which can not be said with confidence about Russian and Chinese spending". "But other presidents never did anything about it because I don't think they understood it or they just didn't want to get involved".
In remarks later during the summit, however, President Trump increased pressure on allies over burden sharing, calling on allies to double defense spending targets to 4 percent, the White House confirmed.
"I am very happy that today we are united in freedom, the Federal Republic of Germany", Merkel added.
The president's critics have accused him of ignoring US barriers to foreign products, and of seeking a tariff-fueled trade war with the Europeans (and the Chinese) that will undermine economies worldwide.
The NATO alliance consists of 29 countries from North America and Europe, including the US and Germany, which was originally set up in 1949 to thwart Soviet aggression in Western Europe. She said Germany was "good partners" with the U.S.
Mr Trump said countries needed to "step up, not over a 10-year period, they have to step up immediately" adding that other United States presidents had raised the issue but "did not do anything about it". We have a fundamental disagreements on principles and objectives between Trump and the Europeans.
Later Wednesday, Mr. Trump met with German Chancellor Angela Merkel on the sidelines of the summit.
However, his comment that "Germany is totally controlled by Russia because they are getting 60 to 70 percent of their energy from Russia and a new pipeline" appeared to misstate German energy use - about 20 percent of which is accounted for by oil and gas imports from Russia. "That is very good, especially for people in eastern Germany".
The feud over defense spending looks set to overshadow other business at the two-day summit.
During his campaign, Trump called North Atlantic Treaty Organisation "obsolete" and suggested the US might not come to the defense of members if they found themselves under attack - a shift that would represent a fundamental realignment of the modern world order.