The US president was speaking in a press conference in Tokyo today, focused on cooperation between the allies in the face of growing concerns on North Korea.
But Mr Trump broke from cordial rhetoric when comparing the two nations financially.
He said: “The Japanese people are thriving, your cities are vibrant and you’ve built one of the world’s most powerful economies.
“I don’t know if it’s as good as ours, I think not… And we’re going to try and keep it that way but you’ll be second.”
Mr Trump continued by saying he wanted to correct a trade imbalance with Japan – actually the world’s third biggest economy – and urged the nation to buy more American military equipment.
He said: ”America is also committed to improving our economic relationship with Japan.
“As president, I’m committed to achieving fair, free, and reciprocal trading relationship. We seek equal and reliable access for American exports to Japan’s markets in order to eliminate our chronic trade imbalances and deficits with Japan.”
Mr Trump was talking with Prime Minister Abe on the first leg of his Asia tour, which will also see him head to China and South Korea.
The US president is on the second day of the 12-day Asian trip that is focusing on trade and North Korea’s nuclear missile programmes.
He said: ”Most importantly, we’re working to counter the dangerous aggressions of the regime in North Korea.”
Calling Pyongyang’s nuclear tests and recent launches of ballistic missiles over Japan “a threat to the civilized world and to international peace and stability”, he added: “Some people said that my rhetoric is very strong. But look what’s happened with very weak rhetoric over the last 25 years. Look where we are right now.”
He said that Japan would shoot North Korean missiles “out of the sky” after completing purchases of US military equipment.
Mr Abe, for his part, said Tokyo would do so “if necessary”.