The American President took to Twitter to lambast the German chancellor after she suggested Europe can no longer rely on the US.
Mr Trump tweeted on Tuesday: ‘We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military. Very bad for US. This will change.’
Mrs Merkel had previously indicated that Germany needs to adopt a more independent stance in world affairs.
Mr Trump’s comments came after a European trip in which he rattled several leaders.
Mrs Merkel said Germany’s relations with the United States are of ‘outstanding importance’ but it must engage with other key nations going forward.
She also suggested in the wake of the Trump visit that Europe’s relationship with Washington had shifted significantly and reiterated her position that ‘we in Europe have to take our fate into our own hands’.
She said the existing Western alliance had been threatened by the current US presidency and Brexit, meaning Germany could no longer fully count on its biggest allies.
Following the G7 summit, which concluded at the weekend, Mr Trump has said he needs more time to decide if the US would continue to back the Paris climate deal.
Germany’s foreign minister, Sigmar Gabriel, said Mr Trump’s ‘short-sighted’ policies had ‘weakened the West’.
He said: ‘Anyone who accelerates climate change by weakening environmental protection, who sells more weapons in conflict zones and who does not want to politically resolve religious conflicts is putting peace in Europe at risk.
‘The short-sighted policies of the American government stand against the interests of the European Union. The West has become smaller, at least it has become weaker.’