He questioned the usefulness of Nato and blasted Germany for being "captive" of Russia.
Trump said the US would have to do something in light of the pipeline deal between Germany and Russia that is funnelling billions into Moscow's economy.
"Pipeline dollars to Russia are not acceptable!" Trump said in a tweet hours after he raised the issue during the Nato Summit in Brussels.
In his remarks, that outraged many in the US and upset his European allies, Trump said that countries like Germany depended too much on Russian gas for their energy supplies.
"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 US is paying for Europe's protection, then loses billions on Trade. Must pay 2 per cent of GDP immediately, not by 2025," he said.
"Billions of additional dollars are being spent by Nato countries since my visit last year, at my request, but it isn't nearly enough. US spends too much. Europe's borders are BAD!" Trump said on Wednesday.
Trump's criticism of America's allies comes days ahead of his meeting with his Russian counterpart Vladimir Putin in Helsinki on July 16.
He said the US sought an increase in defence spending from the Nato countries so as to reduce the American financial burden.
Meanwhile, the House of Representatives on Wednesday passed a resolution expressing support for the countries of Eastern Europe and the North Atlantic Treaty Organization (NATO).
The resolution recognises that Nato remains the most important and critical security link between the United States and Europe and the US' commitment to the principle of collective defence as laid out in Article 5 of the Nato Treaty.
The Senate Foreign Relations Committee voted for passage of a resolution expressing support for the strategic importance of Nato to the US and urging its member states to work together to strengthen the alliance.
"I absolutely support the notion that all Nato countries, especially Germany, need to meet the 2 per cent requirement for spending on defense and increase their capabilities. At the same time, a weakening of the alliance is not in US interests," said Senator Bob Corker.
Congressman Mo Brooks from Alabama voiced support for Trump's efforts to have Nato allies contribute more to Europe's defence.
"A fractured Nato would benefit neither the United States nor Europe; it would only benefit President Putin," said Congressman Rick Larsen.
"At its heart, the Nato alliance is about nations of similar values working together to confront and deter shared threats. It is not a protection racket. While Nato members should fulfill their commitments to spend two per cent of GDP on defense by 2024, no nation is 'delinquent' or owes money to the United States, as the president has suggested," he said.
Larsen has written to Trump about how this fixation on the two per cent commitment demonstrates a willful misrepresentation of both Nato 's mission and how it is funded.