Donald Trump has reportedly handed Chancellor Angela Merkel an invoice for a sum he believes Germany owes the US for Nato spending shortfalls at their recent meeting.
The bill calculated perceived funding deficiencies from Germany since 2002 and included interest, coming to an estimated $300bn (£240bn/€277bn).
Mr Trump has been critical of Nato members he sees as not paying their fair share of the alliance's funding. An agreement was made in 2014 in which Nato countries falling behind the target of spending two per cent of GDP on defence would improve their contributions.
But the bill stretches back 12 further years to when Merkel's predecessor, Gerhard Schröder, committed to higher defence spending.
A German minister branded the invoice as "outrageous".
"The concept behind putting out such demands is to intimidate the other side, but the chancellor took it calmly and will not respond to such provocations," the minister told the Sunday Times.
Merkel's allies called Mr Trump's views on Nato spending "unorthodox".
Other sources told the newspaper Trump's staff have prepared similar bills for other Nato member states which have not met the two per cent target.
Currently, just the UK, US, Poland, Greece and Estonia spend the correct amount or more. Germany, which since World War Two has tended to invest less in defence, spends around 1.2% of GDP but plans on increasing this figure.
The meeting between the two world leaders earlier this month was seemed fraught with tension, as Trump appeared to ignore Merkel's request for a handshake in front of photographers.
Press Secretary Sean Spicer later said the president hadn't heard her and Trump also tweeted he had a "great meeting" with the chancellor.
But the president insisted Germany owed "vast sums of money" to Nato and the US for defence.
The German defence minister, Ursula von der Leyen, responded to the Twitter tirade by saying: "There is no account where debts are registered with Nato."
She also stressed that defence spending was invested areas other than Nato, such as UN peacekeeping missions and the fight against Isis.