"Germany is totally controlled by Russian Federation, because they will be getting from 60 to 70 percent of their energy from Russian Federation and a new pipeline", the president said.
Trump's comments drew forceful pushback from the typically staid NATO Secretary General Jens Stoltenberg, who went back and forth with Trump over the importance of preserving the alliance.
While some diplomats say they are concerned Trump could condition USA help on the 2% spending threshold, others worry the President could scale back a planned funding increase for a European deterrence program.
Trump was due to meet German Chancellor Angela Merkel at the summit later in the day and will meet Russian President Vladimir Putin in Helsinki on Monday.
Merkel, who grew up in communist East Germany, shot back that she had "experienced myself a part of Germany controlled by the Soviet Union, and I'm very happy today that we are united in freedom as the Federal Republic of Germany and can thus say that we can determine our own policies and make our own decisions and that's very good". Germany has been pursuing a pipeline for years that would carry Russian natural gas underneath the Baltic Sea to central Europe, despite criticism from the US and other countries.
"I don't think he understands what alliances are - everything is, 'What are you going to give me and what am I going to get out of it?'" she said.
Trump's pipeline criticism was an unusual line of attack for a president who has appeared eager to improve relations with Putin and dismissed the US intelligence community's assessment that Russian Federation tried to undermine Western democracy by meddling in the 2016 USA presidential election to help Trump win.
There was never any doubt Trump would come down hard on his mostly European allies in the 29-member alliance.
"I think Trump does have a point, but I think the way in which he's making his point is very unhelpful, because he's so unpopular here in Europe".
"They got rid of their coal plants, they got rid of the nuclear".
"If you look at it, Germany is a captive of Russian Federation because they supply", he continued.
The summit is meant to be meeting with allies, however Trump began the trip by airing his grievances over trade with Europe loudly and clearly. "We are talking about trade, we have a very, very good relationship with the chancellor, we have a tremendous relationship with Germany", Trump said with Merkel sitting at his side. Their concerns had already set in ahead of Trump's arrival on the continent, following weeks during which the US President has increasingly and vociferously aired out his grievances against many of them.
Indeed, the steady drumbeat of negative comments from Trump is beginning to overwhelm reassurances from the rest of the U.S. national security establishment, said James M. Goldgeier, a visiting senior fellow at the Council on Foreign Relations.
A source close to French President Emmanuel Macron also played down Trump's words as rhetoric, saying "it is not a new demand". The US' largest military hospital overseas is in Germany, and it uses bases in the country as "lily pads" to go back and forth from countries like Afghanistan.
Other leaders have also been trickling in, and continue to arrive after Trump. "Will they reimburse the USA?" "They just did it more politely", Elisabeth Braw, adjunct fellow from the Center for European Policy Analysis, told CNN. "I have great confidence they'll be spending more".
That's not how the spending works. He also called Brussels a "hell hole" and "a mess". "And so alliances are a lot more than the balance sheet, and I don't think he fully understands that". "He may be the only one, but that's OK with me".
Responding to Trump's recent criticism - or perhaps anticipating more - European Council President Donald Tusk offered a rebuttal ahead of Trump's arrival on European soil.
It's unclear exactly how much money Germany stands to make from the project, but it's likely to be in the billions of dollars.