In a statement released on Sunday, Ursula von der Leyen said "there is no debt account in NATO. To relate the 2% defense spending that we want to reach in the next decade solely to NATO is wrong.
"The defense spending also goes to UN-peace mission, into European missions and towards our contributions to the fight against ISIS terrorism."
Von der Leyen was responding to claims by Trump that some NATO allies owe money after not meeting defense spending targets.
In its recent annual report
, NATO estimated that Germany spent 1.2% of its GDP on defense in 2016, a figure that is expected to rise in 2017 and beyond.
Trump: NATO members' spending 'very unfair' to US
In a joint press conference with German Chancellor Angela Merkel, who visited Washington last week, Trump said
that he "reiterated... strong support for NATO, as well as the need for our NATO allies to pay their fair share for the cost of defense.
"Many nations owe vast sums of money from past years and it is very unfair to the United States," he said. "These nations must pay what they owe."
The statement is a mischaracterization of the commitments that NATO members have -- under the treaty, countries in the bloc have agreed to target a spend on defense of 2% of GDP, but do not accrue debts if they have not met these targets.
Only five of the bloc's 28 members -- the US, Greece, Poland, Estonia and the UK -- meet the alliance's target, which NATO also terms a "guideline" in its annual report. However, "many others" plan to reach 2% by 2024, the report states.
Trump also said that he had thanked the German leader for her commitment towards an increase in defense spending.
On Saturday Trump took to Twitter to confront what he characterized as media reports which reported that his summit with Merkel had gone badly.
He also took the opportunity to once again push home the incorrect assertion that NATO signatory countries like Germany owe "vast sums" and that the US must be "paid" for its contribution.
"Despite what you have heard from the FAKE NEWS, I had a GREAT meeting with German Chancellor Angela Merkel," he tweeted..
"Nevertheless, Germany owes vast sums of money to NATO & the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!"
Former US Ambassador to NATO Ivo Daalder replied to the tweets with a series of twitter messages of his own, laying out how the treaty commitments really work.
"Sorry, Mr. President, that's not how NATO works," he tweeted. "The US decides for itself how much it contributes to defending NATO."
However, as Daalder also wrote in his nine-tweet explanation, "Those who currently don't spend 2% of their GDP on defense are now increasing their defense budgets. That's a good thing."
Before Trump took office, he rattled NATO members, when he called the organization "obsolete" in a joint interview with the Times of London and the German publication Bild.
"I said a long time ago that NATO had problems," he said in the January interview.
"Number one it was obsolete, because it was designed many, many years ago.
"Number two the countries weren't paying what they're supposed to be paying," he said, adding that this was unfair to the United States.
Various members of his administration, including Vice President Mike Pence
, have since reiterated the US' commitment to NATO.