Merkel called that "extremely problematic, not to say very unsatisfactory".
The German Chancellor also said that there was resistance at the meeting to drafting language that would have called for more aid for refugees.
Merkel's challenger for the chancellor job in September elections told public broadcaster ARD later today that the answer to Trump's go-it-alone approach is for European countries to bond ever closer together.
"Europe is the answer," Martin Schulz said. "Stronger cooperation among the European countries at all levels is the answer to Donald Trump."
He added that leaders must never underestimate Trump.
"I think, people should have staked out clearer positions at the Nato summit, but most certainly by the time of the G7 summit," he said, referring to two international summits last week where Trump ruffled feathers by criticising partner countries on defence spending or standing as the sole veto to language endorsing action on climate change.
Schulz likened Trump's behaviour at those meetings to that of an "authoritarian leader" who wants to "humiliate others".
Merkel, of the centre-right Christian Democrats, will face Schulz of the centre- left Social Democrats when Germans pick their next leader in September.
Merkel's comments amounted to the toughest review yet of Trump's trip to Europe, which inflamed tensions rather than healing them.
It was an unusually stark declaration from the normally cautious head of Europe's most powerful economy, and a grim take on the transatlantic ties that have underpinned Western security in the generations since World War II.
Although relations between Washington and Europe have been strained at times since 1945, before Trump there has rarely been such a strong feeling from European leaders that they must turn away from Washington and prepare to face the world alone.
The German leader received a minute-long ovation for her comments, which came as she seeks to whip up voter support ahead of September elections.
Although her message was partly aimed at her own electorate, it was a measure of how badly relations have deteriorated with Trump's United States that hitting Washington now wins votes while working with it could be perilous.
The remarks were a clear repudiation of Trump's troubled few days with European leaders, even as Merkel held back from mentioning the US President by name.
On Friday, Trump had harsh words for German trade behind closed doors. Hours later, he blasted European leaders at Nato for failing to spend enough on defence, while holding back from offering an unconditional guarantee for European security.
Then, at the Group of Seven summit of leaders of major world economies at the weekend, he refused to endorse the Paris agreement on combating climate change, punting a decision until this week.
Merkel's comments were similar to some she made shortly before Trump's inauguration in January. But they carry extra heft now that Trump is actually in office - and after Trump had a days-long opportunity to reset relations. Instead, by most European accounts he strained them even more.
"The belief in shared values has been shattered by the Trump Administration," said Stephan Bierling, an expert on transatlantic relations at Germany's University of Regensburg.
"After the inauguration, everyone in Europe was hopeful that Trump would become more moderate and take into account the positions of the G-7 and of Nato. But the opposite has happened. It's as if he is still trying to win a campaign."
Trump had a different take.
"Just returned from Europe. Trip was a great success for America. Hard work but big results!" Trump wrote today, reviving a prolific Twitter habit that had slackened during his days on the road.
But many European leaders emerged from their meetings with Trump filled with fresh worry. Trump was far more solicitous towards the autocratic king of Saudi Arabia last week, telling him and other leaders of Muslim-majority countries - many of them not democratically elected - that he was not "here to lecture". Days later in Brussels he offered a scathing assessment of Washington's closest allies, saying they were being "unfair" to American taxpayers.
The practical consequences of the rift remain uncertain. The US remains the largest economy in the world, and its military is indispensable for European security, putting a clear limit on Europe's ability to declare independence. American consumers also form an important market for European products - including the German BMWs that Trump complained about in closed-door meetings in Brussels, according to German press accounts.
Nor is Europe united in its approach to Trump: Hungarian Prime Minister Viktor Orban, who has cracked down on critics at home, has embraced the US leader. British Prime Minister Theresa May has also tried to maintain ties - though that's in part because she needs partners as she leads her country out of the European Union.
Even as Merkel positions herself ahead of the election, the message could be the signal of a shift away from the US, perhaps even one that could outlast Trump's time in office, and that would weaken US global power over the long term.
European leaders are developing plans to deepen military cooperation independently of the US. They are also reaching out to economic partners in Asia that Trump has spurned. All of those shifts will have consequences that extend years, analysts say.
"Merkel's comments today are a reminder that Trump's failures are, while he's president, also America's failure, and damage America," the conservative Trump critic William Kristol, who edits the Weekly Standard magazine, wrote on Twitter.
The landslide election in France of President Emmanuel Macron this month has revived hopes for Franco-German cooperation on efforts to bolster European defence initiatives. European leaders want to coordinate their defence purchasing and do more to have standing military capabilities that are deployable outside Nato command structures, where the US is the dominant force.
Germany hiked its military spending by US$2.2 billion this year, to US$41 billion, though it remains far from being able to stand on its own militarily.
Merkel and Macron have vowed to work together to further the pro-globalisation agenda that Trump stands against.
Merkel's comments were not the only sign of a Europe determined to hit back. Macron acknowledged that he came prepared for his handshake with Trump, who likes to throw others off balance with a firm yank of the arm. Macron appeared to force Trump to keep shaking hands even after the US leader tried to disengage.
"We must show that we will not make small concessions, even symbolic ones," Macron told France's Journal du Dimanche in remarks published today. He called it "a moment of truth".
- additional reporting DPA
