Trump and Merkel didn't shake hands in Oval Office photo op

The pair spoke at the Ireland Funds Gala Dinner in Washington

Trump, during a joint press conference with Merkel at the East Room of the White House on Friday, refused to go back on his claim that the British intelligence tapped his phones at the request of former US President Barack Obama in 2016, thereby putting at risk a major rift with one of the most important allies of the US.

He said Germany must stump up more money to the USA in order to cover the cost of the defence it provides.

The press was brought into the Oval Office where Merkel was seated alongside Trump Friday afternoon, and the two leaders gave only perfunctory answers to shouted questions from the media.

Trump repeated his criticism of countries in the alliance that don't meet the goal during the press conference. Only the USA and four other members now reach the benchmark of spending 2% of GDP on defence. The US, on the other hand, contributes 3.6% - nearly double the requirement.

Trump also reaffirmed the United States' "strong support" for North Atlantic Treaty Organisation but reiterated his position that North Atlantic Treaty Organisation allies need to "pay their fair share" for the cost of defense. Germany now spends 1.23% of its GDP on defence, but it is being increased.

While Trump has called for banning refugees, Merkel touted Germany's willingness to accept them and a spokesman said the chancellor had to "explain" worldwide refugee law to Trump when the two spoke by phone shortly after his inauguration. Trump set the tone for his relations with Merkel during his campaign previous year, saying her decision to allow refugees into Germany was a "catastrophic mistake" and suggested she was "ruining Germany".

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"But this has to be done by looking at the refugees as well, giving them opportunities to shape their own lives and where they are", Merkel said on Friday.

"We said nothing. All we did was quote a certain very talented legal mind who was the one responsible for saying that on TV", Trump said.

She also said that Germany was committed to increasing defense spending and paying 2 percent of the country's GDP to fund North Atlantic Treaty Organisation. On Fox, anchor Shepard Smith said the network knew of no evidence that Trump was spied on and that Fox couldn't confirm Napolitano's commentary.

Comments like that have prompted some of Trump´s fiercest critics to declare Merkel the new "leader of the free world"-a moniker normally taken up by the occupant of the White House". You look at China, virtually any country we do business with, it's not exactly good for our workers. Trump backed Britain's departure from the European Union and has expressed skepticism of multilateral trade agreements.

But Merkel argues that protectionist trade policies would hurt the overall economies of both countries, and highlights German companies like Volkswagen AG that have opened factories in the US. The responsibility for housing refugees, Merkel added, was something the two leaders had "an exchange of views" on. 'That would be another example of fake news'.

Trump famously criticized Merkel on a number of issues throughout the presidential campaign.

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