"This is not fair to the people and tax payers of the United States", he added.
Leaders had hoped for more, although a White House official insisted Mr Trump, by being a member of the alliance, supported NATO's collective defence clause, which stipulates an attack on one ally is an attack against all.
Trump has also been critical of the European Union, going so far as to label himself "Mr. Brexit" when Great Britain left the EU, while the nationalist movement that helped elect him in the United States has also surged across Europe, shaking the consortium.
France's President Emmanuel Macronm Belgian Prime Minister Charles Michel and Luxembourg's Prime Minister Xavier Bettel clearly looked upset by the remarks and were seen talking among themselves as Trump spoke. He noted 23 of the 28 member nations do not meet the spending guideline.
As a presidential candidate, Trump railed against NATO's financial burden-sharing, suggesting the US might only come to the defense of countries that meet the alliance's guidelines - for committing 2 percent of their gross domestic product to military spending.
Explicitly endorsing it "would be redundant", the official said.
Now, Trump does actually have a point here. He's retracted his vow to label China a currency manipulator and has lavished praise on Chinese President Xi Jinping. Only five members now meet the target: Britain, Estonia, debt-laden Greece, Poland and the United States, which spends more on defense than all the other allies combined.
While he also accused low-spending members of the alliance of owing "massive amounts of money" to NATO, Trump said he and allies would drive out militants and urged all nations to do the same. "As we raise our flags today, our alliance stands strong united and resolute", he said.More news: 'Profound, Political Courage:' Christian Leaders React to Trump's Middle East Trip
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"I said it was obsolete", Trump said.
Hours before the summit officially started, NATO Secretary-General Jens Stoltenberg announced that the military alliance will join the USA -led coalition fighting the Islamic State in Syria and Iraq. An anti-terror coordinator may also be named.
Nor would the Prime Minister say whether he had any concerns about Mr. Trump sharing highly classified intelligence - reportedly from Israel - with Russian Foreign Minister Sergey Lavrov during a meeting in the Oval Office earlier this month.
Trump advisers vigorously contest the idea that the president's more measured tenor overseas is the result of significant staff intervention, arguing that the president himself is behind the approach for his first foreign trip. The sensitive intelligence was printed in the New York Times.
Tusk said in a televised statement after the meeting with Trump that trade was one of the issues that remained "open".
Trump's harsh words came despite North Atlantic Treaty Organisation saying it would formally endorse joining the US-led coalition against IS at the summit, in the face of reservations in France and Germany about getting involved in another conflict.
Tusk also said that "Some issues remain open like climate and trade", where the European Union is pushing for full respect of the Paris Agreement on climate and open multilateral trade deals. He said unity must be found around values like freedom and human rights and dignity.