Xavier Bettel appeared to whisper to the French President Emmanuel Macron as the US leader berated fellow member states for failing to contribute.
The pair are seen looking at each other during the uncomfortable speech, with Mr Bettel covering his mouth during the address.
President Trump used his speech outside the new Nato headquarters to pressure "23 of the 28 member nations" who are failing to meet the commitment to spend two per cent of GDP on defence.
Last November, it was reported only the United States, Greece, United Kingdom, Estonia and Poland had fulfilled the budget pledge.
Donald Trump's demands for more Nato spending were mocked by France and Luxembourg's leader
Germany and France were among the European nations who had failed to spend the promised amount.
President Trump insisted the reliance on American money was "unfair" as EU looked at each other in shock during the address.
The American continued: "This is not fair to the people and taxpayers of the United States and many of these nations owe massive amounts of money from past years and not paying in.
NATO countries' heads of states gather in Brussels
Thu, May 25, 2017
NATO countries' heads of states and governments gather in Brussels for a one-day meeting
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U.S. President Donald Trump and Britain's Prime Minister Theresa May react during a ceremony at the new NATO headquarters in Brussels
"Those paying in the past years over the last eight years the United States spent more on defence than all other Nato countries combined if all Nato members had spent just two per cent of their GDP on defence last year, we would have another $199bn for our collective defence."
At this stage, Mr Bettel leant over to his French colleague, Mr Macron, and appeared to laugh at President Trump's comments.
France and Luxembourg are among the nations who fail to meet the two per cent contribution pledge.