The administration sought to cut its contribution to Nato’s direct budget from 22 per cent to around 16 per cent, CNN reported, citing US defence officials.
It would bring its contribution closer to Germany, which pays 14.8 per cent. The UK pays 10 per cent.
Other Nato members are expected to make up the deficit, US and Nato officials told CNN.
“Under the new formula, cost shares attributed to most European Allies and Canada will go up, while the US share will come down,” one Nato official said. “This is an important demonstration of Allies’ commitment to the Alliance and to fairer burden-sharing.”
The direct budget funds the cost of maintaining Nato’s headquarters in Belgium and some military operations and is separate to national defence budgets Mr Trump has frequently criticised.
Mr Trump has repeatedly attacked the alliance, which he described in a tweet as “obsolete and disproportionately too expensive (and unfair) for the US”.
He has complained other Nato members do not pay enough to maintain their own defence through not meeting the 2 per cent Nato defence spending target.
One US defence official told CNN the money saved by the US would go to fund other US military and security programmes in Europe.
Mr Trump will join other world leaders in London for the 70th anniversary Nato summit on 3-4 December, where he is expected to repeat his demand for European nations and Canada to increase their defence spending.
The meeting comes after Emmanuel Macron, France’s president, described the “brain death” of Nato due to waning US support.
Mr Macron later said his comments had served as a useful wake-up call to alliance members.
“The questions I have asked are open questions, that we haven’t solved yet,” Mr Macron said at a joint news conference in Paris with Jens Stoltenburg, Nato’s secretary general.
“Peace in Europe, the post-INF [Intermediate-range Nuclear Forces Treaty] situation, the relationship with Russia, the Turkey issue, who’s the enemy? So I say: as long as these questions are not resolved, let’s not negotiate about cost-sharing and burden-sharing, or this or the other.”
“So we maybe needed a wake-up call. I’m glad it was delivered, and I’m glad everyone now thinks we should rather think about our strategic goals,” Mr Macron said.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies