The President has long advocated a reduction in down America’s huge deficit – which stands at an eye-watering £406billion ($566bn) – and insists a trade war fought with tariffs on steel and aluminium will help redress the balance.
Germany is one of the many nations Mr Trump has singled out for employing “unfair” trade practices, but he has specifically criticised Berlin for paying “far less than they should on Nato”.
But in a dig at President Trump’s new trade policy, Angela Merkel suggested her country was selling £216bn ($301bn) more than it was importing simply because German products were in demand.
She said Germany was beginning to export less of its products overseas, but added other factors outside of her control which had helped fuel Germany’s massive surplus.
Speaking on her official podcast, she said: “There are a number of factors on which we have no influence whatsoever.
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“For example when it comes to exchange rates, when it comes to oil prices, then these are things that we cannot influence and of course the trade surpluses also show that our products are in demand.”
She went on to add Berlin would be implementing measures to further lower its surplus by encouraging more domestic consumption instead of relying on overseas trade.
Donald Trump announced hefty tariffs of 25 percent on imported steel and 10 percent on aluminium earlier this month, despite protests from some of his closest economic advisors and those in his own party.
He insists the levies will revive America’s declining metal industries and help him fulfil a key election promise.
But the move has already cost him his top economic advisor, Gary Cohn, who resigned following Mr Trump’s tariff announcement.
Meanwhile, the duties threaten to spark a trade war with the European Union.
The bloc has warned it will be forced to impose reciprocal measures and lamented a trade war will only serve to damage business on both sides of the Atlantic.
However the US has already granted exemptions from the tariffs to Canada, Mexico and Australia, and Mr Trump has signalled he would be willing to offer a similar deal to the UK and other European countries if they support him in his fight against what he describes as Chinese “overproduction”.
Representatives from the EU, of which the UK is still a part, met with US Trade Representative Robert Lighthizer last weekend to establish exactly how the tariffs would impact Europe.
According to people briefed on the outcome of the talks, exemptions could be available for nations willing to back Mr Trump in his trade war again China.
(Additional reporting by Monika Pallenberg.)