Donald Trump accused Germany of being “totally controlled by Russia” on Wednesday in a blistering attack on an ally that overshadowed the Nato summit.
The US president accused Angela Merkel’s country of being “captive” to Russia because of its joint energy deals, including a proposed new gas pipeline.
He questioned why America was spending billions of dollars countering the Kremlin through Nato while European countries handed similar amounts to Russia in business deals.
Mr Trump also suggested that Nato’s 29 members spend 4 per cent of their GDP on defence - double the 2 per cent target that all but a handful of countries are already missing.
The criticism drew a rebuttal from Mrs Merkel, who said Germany was “independent” and pointedly referenced her upbringing in Soviet-controlled East Germany.
The clash undermined the message of “strength and unity” that American officials had hoped would be the main takeaway from the two-day gathering in Brussels.
However the worst fears of Nato officials - that Mr Trump would threaten to withdraw troops from Europe unless defence spending was increased - did not come to pass, with the US president declining to issue the warning when asked.
The row begun on Wednesday morning when Mr Trump used a meeting with Jens Stoltenberg, the Nato secretary general, to voice his criticism.
What good is NATO if Germany is paying Russia billions of dollars for gas and energy? Why are there only 5 out of 29 countries that have met their commitment? The U.S. is paying for Europe’s protection, then loses billions on Trade. Must pay 2% of GDP IMMEDIATELY, not by 2025.— Donald J. Trump (@realDonaldTrump) July 11, 2018
Mr Trump said: “Germany, as far as I'm concerned, is captive to Russia because it's getting so much of its energy from Russia.
“So we're supposed to protect Germany, but they're getting their energy from Russia. Explain that. It can't be explained.”
He singled out the Nord Stream II pipeline, which is proposed to carry natural gas between Russia and Germany, for particular criticism.
Trump attacks Germany puff
The project, which is being led by the Russian state-owned company Gazprom, has been criticised because it increases the EU’s reliance on Russian energy.
Mr Trump said the deal would see European countries pay “billions of dollars into the coffers of Russia”. He added: “We're protect you against Russia, but they're paying billions of dollars to Russia, and I think that's very inappropriate.”
The president’s officials including John Kelly, Mr Trump's chief of staff, and Mike Pompeo, his secretary of state, could be seen sitting silently as the president voiced the criticism.
Nato defence expenditure and major annual exercises involving US troops
Mr Stoltenerg attempted to push back during the discussion, noting that “even during the Cold War, Nato allies were trading with Russia”.
But Mrs Merkel issued a firm rebuttal to reporters when she arrived at the summit three hours later. "I have experienced myself how a part of Germany was controlled by the Soviet Union,” she said.
"I am very happy that today we are united in freedom, the Federal Republic of Germany. Because of that we can say that we can make our independent policies and make independent decisions. That is very good, especially for people in eastern Germany."
Ms Merkel also defended her country’s contribution to the alliance, saying: “Germany does a lot for Nato.”
The pair later met for talks, with both praising the strength of relationship in an apparent attempt to put on a united front.
Mr Trump said America has a “tremendous relationship with Germany”, while Mrs Merkel said she was “very pleased” to have an “exchange of views”.
Nord Stream gas pipeline
It is the second time Mr Trump has fiercely criticised an ally at a major gathering of world leaders in as many months.
In June, the US president said Justin Trudeau, the Canadian prime minister, was “very dishonest and weak” after a G7 gathering where he failed to sign the joint communique.
Mr Stoltenberg played down the row at a press conference on Wednesday afternoon, saying: “We do have disagreements. But most importantly we have decisions that are pushing this alliance forwards and making us stronger.
During the gathering Mr Trump was spotted briefly chatting to Theresa May, the Prime Minister, as the pair posed for a group photograph. He flies to Britain this afternoon for a three-day visit.
Tusk launches salvo against Trump
European officials have expressed hopes that Nato members can bridge their differences but EU President Donald Tusk launched his own salvo against Mr Trump.
"Dear America, appreciate your allies, after all you don't have that many," Tusk said, before reminding Trump that European troops had come to America's aid following the September 11, 2001 attacks on the United States.
"Please remember this tomorrow when we meet at the Nato summit, but above all when you meet President Putin in Helsinki. It is always worth knowing who is your strategic friend and who is your strategic problem," he said.
The European Union makes it impossible for our farmers and workers and companies to do business in Europe (U.S. has a $151 Billion trade deficit), and then they want us to happily defend them through NATO, and nicely pay for it. Just doesn’t work!— Donald J. Trump (@realDonaldTrump) July 10, 2018
Trump will meet the Russian leader in the Finnish capital on July 16 for their first summit amid an ongoing investigation in the US into possible Trump campaign collusion with Russia.
To the embarrassment of Downing Street on Tuesday, he said that Britain was a country in "turmoil" and that "frankly, Putin may be the easiest" part of his European itinerary, with his arrival in the UK tomorrow following the Nato summit.
European diplomats feared a repeat of the G7, when Trump clashed with his Western allies, withdrawing from a joint statement and calling Canadian Prime Minister Justin Trudeau "dishonest and weak" before meeting North Korean dictator Kim Jong-un at a summit afterwards and praising him as "very talented".
Donald Trump on his upcoming UK visit
There have been fears that Trump, keen to be seen to make a breakthrough with the Kremlin strongman, might make concessions that would weaken Western unity over issues such as Ukraine and Syria.
Trump set the stage for clashes at the summit by writing to around a dozen allies to berate them for lagging on the 2014 pledge to spend 2 per cent of GDP on defence by 2024.
US ambassador to Nato Kay Bailey Hutchison told reporters that Trump would also recommit to one of the founding articles of Nato - Article 5 - which holds that an attack on one member is an attack on them all.