Despite his controversial comments, the Bundestag President declared Mr Trump was “not entirely wrong” about forcing member states to up their defence, saying that he can “understand that critical position”.
Mr Schäuble said: “The US president has a different way of communicating, which is strange to me, and I do not like it. But on the question of military distribution burdens he is not entirely wrong.
“I’m not a big fan of Trump, but I can understand that critical position.”
He also insisted that Germany must treat Mr Trump “with a mixture of respect and self-confidence”.
During the Nato summit in Brussels headquarters, the US president repeatedly lashed out at Germany, calling them a “prisoner” of Russia.
While at breakfast with Nato Secretary General Jens Stoltenberg. Mr Trump said: “Germany is completely controlled by Russia.”
He added that Germany is paying “billions” for gas to Russia while Nato protected them from the Russian aggression, insisting that Berlin’s behaviour was “very inappropriate”.
Mr Trump added: “I think that’s a very bad thing for Nato that should not happen. And I think we need to talk to Germany about that.”
He said that Germany was a “rich country” and demanded Ms Merkel must increase military defence spending “immediately”, insisting that the country could “do it immediately tomorrow without any problems”.
However, Ms Merkel hit back, insisting that Germany does “a lot for Nato” and that Berlin was “independent” and did not depend on Russia for its defence measures.
Emphasising Germany’s as a free and independent state, Ms Merkel said: “We make our own policy and make independent decisions.”
Meanwhile, German Defence Minister Ursula von der Leyen lashed out at Mr Trump’s criticism towards Germany.
Speaking at a side event at the Nato summit, she said: ”We have a lot of issues with Russia without any doubt.”
When asked about Mr Trump’s comments, Ms Leyen added: “On the other hand, you should keep the communication line between countries or alliances and opponents without any question”.
The US president declared victory in the Nato summit, claiming European members had agreed to increase spending on defence by £30billion.
He said this morning: “Presidents have been trying unsuccessfully for years to get Germany and other rich Nato Nations to pay more toward their protection from Russia.
“They pay only a fraction of their cost.
“The US pays tens of Billions of Dollars too much to subsidise Europe, and loses Big on Trade!
“On top of it all, Germany just started paying Russia, the country they want protection from, Billions of Dollars for their Energy needs coming out of a new pipeline from Russia. Not acceptable!”
Yesterday, Mr Trump insisted all Nato members must put four percent of their countries’ GDP into the NATO budget, despite the minimum requirement of two percent.
The President reportedly threatened to quit Nato if his increased spending demands were not met.