Trump refused to react or even look at Merkel when reporters and photographers asked him to shake hands with the German Chancellor.
President Trump reiterated his stance that European allies need to meet their end of the bargain to continue benefiting from the military alliance.
Mr Trump set the tone for his relations with the German chancellor during his campaign past year, saying her decision to allow refugees into Germany was a "catastrophic mistake" and suggested she was "ruining Germany".
Mr Trump's "fake news" statement comes after what appeared to be an awkward moment in front of the cameras in the Oval Office when the President seemed to ignore Chancellor Merkel's offer of a handshake.
- Keith Boykin (@keithboykin) March 17, 2017GREATEST Freudian slip from Trump just now in Merkel press conference: "We're a very powerful company.er, country".
Asked if he ever tweets things he regrets, Trump replied, "Very seldom".
Prior to his inauguration, Mr Trump declared North Atlantic Treaty Organisation "obsolete" but has since modified his stance, telling European leaders the alliance remains of strategic importance.
Today he expressed support for North Atlantic Treaty Organisation but pushed for nations to "pay what they owe" - working toward contributing at least 2 percent of each member country's GDP.
Trump also recently made a jab that Germany's strong economy is only due to a now weak Euro.
The two leaders held a joint press conference in the East Room of the White House just a few hours ago to discuss strengthening North Atlantic Treaty Organisation, fighting Islamic State and resolving Ukraine's conflict.
The U.S. spends 3.6 percent of its GDP on North Atlantic Treaty Organisation, while the organization's total spending per members' GDPs averages 2.4 percent.
Garrison: And so when the conversation turns to trade and business topics between Trump and Merkel, what do you think Merkel is going to emphasize in terms of what is important to her country?
Trump may have been attempting to somehow make light of either his own claims, or Merkel's history as a target of the NSA.
'I am not an isolationist by any stretch of the imagination, ' Trump said.
The visit by the German Chancellor was cancelled two hours before she was due to board her presidential plane.
During the meeting, Trump complained that the US had been treated "very, very unfairly" and sarcastically praised German trade officials for having an upper hand over their American counterparts. "At least we have something in common, perhaps", Trump said, apparently referencing the 2013 revelation that the NSA had listened in on phone calls by Merkel and other European leaders.
The talks aimed to represent a restart of a relationship complicated by Mr Trump's rhetoric on the campaign trail.