President Donald Trump has said Germany owes Nato “vast sums of money” and should pay the United States more for defending it.
He made the statement in a series of tweets from his Mar-a-Lago base in Florida on Saturday morning.
Mr Trump, after a video appeared to show him ignoring Ms Merkel's request to shake hands at a photo opportunity, said: “Despite what you have heard from the FAKE NEWS, I had a GREAT meeting with German Chancellor Angela Merkel.
“Nevertheless, Germany owes vast sums of money to NATO & the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!”
The US has some 35,000 service personnel stationed in Germany, according to US military figures.
Prior to his inauguration, Mr Trump declared Nato “obsolete” but has since modified his stance, telling European leaders the alliance remains of strategic importance.
Only the US and four other members currently reach the alliance's benchmark of spending 2 per cent of GDP on defence. Germany spends 1.23 per cent, but this is being increased.
And Mr Trump said during the Chancellor's visit he was encouraged to see Germany increasing the figure. He said: “Many countries owe vast sums and it is unfair.”
James Mattis, the US Secretary of Defence, told European leaders at a Nato summit in February his country would "moderate its commitment" to the group unless member states put in more money.
At the time he said: “No longer can the American taxpayer carry a disproportionate share of the defence of Western values. Americans cannot care more for your children’s security than you do.
“Disregard for military readiness demonstrates a lack of respect for ourselves, for the alliance and for the freedoms we inherited, which are now clearly threatened.”
Mr Trump and Ms Merkel encountered each other for the first time on Friday and initially met with US and German business leaders to discuss modelling a US vocational training programme on Germany’s apprenticeship scheme, as an alternative to university education.
At a joint press conference Mr Trump was asked about his stance on global trade and a bilateral agreement with the EU.
He said firmly he was not “an isolationist”, rather a “fair trader”. He said the United States had been treated "unfairly" in the past.
Ms Merkel also emphasised the need for trade deals that fairly benefit both countries. “That is the spirit I think in which we ought to be guided in negotiating any agreement between the United States of America and the EU,” she said.
Mr Trump was further grilled by German reporters – who have won praise from their American counterparts – about his claim to have been wiretapped by former President Barack Obama.
After quipping that he and Ms Merkel may have had “something in common” on that front, referencing prior revelations the Chancellor had come under surveillance by the US National Security Agency (NSA), he defended his press secretary, Sean Spicer, who at an official briefing had repeated claims that Britain's GCHQ was behind the alleged wiretap of Trump Tower.
In a rare statement, GCHQ branded commentator Andrew Napolitano's claim "utterly ridiculous", while the NSA's second-in-command, Rick Ledgett, said it showed “a complete lack of understanding in how the relationship works”.
Mr Trump told reporters: “We said nothing. All we did was quote a certain very talented legal mind who was the one responsible for saying that on television.You shouldn't be talking to me, you should be talking to [the television network] Fox.”
The President also said he “very seldom” regrets anything he tweets.
Mr Trump has come under increasing pressure over his sensational claim, made on Twitter, that Mr Obama had Trump Tower under surveillance around the time of the election last year.
On Thursday the Senate Intelligence Committee said it had "no indications" that was the case.
Additional reporting by agencies