Donald Trump's understanding of Nato was questioned yesterday after he claimed Germany owed the alliance and the US "vast sums of money".
he president said "the United States must be paid more for the powerful, and very expensive, defence it provides to Germany".
But his demand was rejected by German defence minister Ursula von der Leyen, who responded tersely that "there is no debt account at Nato".
She added: "Defence spending also goes into UN peacekeeping missions, into our European missions and into our contribution to the fight against Isil terrorism."
Ivo Daalder, the former US ambassador to Nato, also took issue with Mr Trump's claims and replied directly to the president on Twitter.
"I'm sorry, Mr President but that is not how Nato works," he said, pointing out that Nato spending was not a "financial transaction" between countries but a joint commitment to spend 2pc of GDP on defence.
He went on to argue that America's large military commitment to Nato was not a "favour to Europe" but a mutually beneficial arrangement, because keeping Europe "whole and free" was key to US interests.
Mr Trump has clashed with Germany in the past, as it currently spends just 1.18pc of GDP on defence.
Mr Trump's demand came a day after Angela Merkel, the German chancellor, reiterated Germany's intention to increase spending to 2pc during her first visit to the White House under the new administration.
The spat marked the beginning of what may well be the most important week of Mr Trump's early presidency.
Today, James Comey, the director of the FBI, will testify at a public hearing as part of an investigation by the House Intelligence Committee in Congress on Russian meddling in the US election, including potential connections between Mr Trump's inner circle and the Kremlin.
It will be the first time that Mr Comey, along with Mike Rogers, the director of the National Security Agency, have spoken publicly since Mr Trump took office on an issue that continues to dog his presidency.
Neil Gorsuch, Mr Trump's Supreme Court nominee, will also face his senate confirmation hearing today.
Democrats will make the case that, as a pro-business social conservative, he is insufficiently independent of the president.
On Thursday, Congress is expected to vote on the president's bill to "repeal and replace" Barack Obama's healthcare system.
British foreign secretary Boris Johnson is to fly to Washington this week to patch up links with the Trump administration, after the president accused GCHQ, the British intelligence agency, of spying on his presidential campaign.