The U.S.is at 3.5 percent, or $685 billion a year ago.
A White House spokeswoman said his remarks came as he was urging leaders to increase their outlays on defence and were not a formal proposal.
Trump has spent weeks berating members of the alliance for failing to spend enough of their money on defence, accusing Europe of freeloading off the USA and raising doubts about whether he would come to members' defence if they were ever attacked.
Trump arrived on the back of a barrage of criticism of Europe on issues ranging from trade to energy and above all his claims that the continent freeloads on the back of America for its defence.
Trump had opened the first day of talks in Brussels on Wednesday with a public diatribe against Germany, the second biggest state in the Western defence alliance, before the mood appeared to have calmed as the summit went into its second day, focusing on operations beyond Europe.
Despite the first day's haranguing of allies for failing to meet spending targets and accusing Germany of being a prisoner to Russian energy, Trump was mild-mannered at a private dinner on Wednesday and avoided any outbursts that many North Atlantic Treaty Organisation diplomats had feared.
He said the USA "pays tens of Billions of Dollars too much to subsidize Europe" and demanded that members meet their pledge to spend 2 percent of GDP on defence, which "must ultimately go to 4%!"
"If you look at it, Germany is a captive of Russian Federation because they supply", he continued. At breakfast he had spoken of Germany as a "captive" of Russian Federation because of the two countries' energy relationship, which he labelled "inappropriate". A source close to Macron said Trump had voiced his "personal attachment" to Europe and gave "rather positive and constructive messages" to his allies.
A USA conservative political commentator suggested that perhaps Trump was looking in the direction of the United States, while his counterparts were looking at Europe. Also present was France's President Emmanuel Macron, who tried this year to charm Mr Trump into more harmonious transatlantic relationship, only to see the United States president withdraw from the 2015 Iranian nuclear deal and impose tariffs on European goods. Must pay 2 per cent of GDP IMMEDIATELY, not by 2025. "And I am very happy that today we are united in freedom", Merkel said.
Stoltenberg estimated European allies and Canada will add $266 billion to their military spending by 2024 and said, "this is really adding some extra momentum", apparently meaning Trump's pressure. We are going to have to do something.
"We call upon [North Korea] to fully implement its worldwide obligations; to eliminate its nuclear, chemical, and biological warfare capabilities and ballistic missiles, and abandon all related programmes", the statement said.
Trump has several times assailed Germany for not spending a large enough proportion of its gross domestic product on defense.