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"We have a very big trade deficit with them, and we protect them," Trump said. "We lose money on trade, and we lose money on the military."
"We have right now 32,000 soldiers on the border between North and South Korea. Let's see what happens," Trump said.
The President went on to argue, "Our allies care about themselves. They don't care about us."
On Friday, South Korean Finance Minister, Kim Dong-yeon, appeared to hit back at Trump's remarks.
"We don't think it's ideal to link an economic issue with such an issue [the withdrawal of US troops]," said Kim, while speaking on South Korean TBS radio.
"The South Korean government, with national interest of South Korea as priority, will consider striking a balance in the national economy and among multiple industries," said Kim.
"We have many issues to take into consideration dealing with the United States as well."
Longstanding ally
South Korea and the US maintain a longstanding defense partnership.
Last year, the annual exercises, code-named Key Resolve and Foal Eagle, saw an estimated 3,600 additional US service members deployed to join the 28,000 US troops already based in South Korea to participate in the drills, which included ground, air, naval and special operations field exercises.
Both exercises, according to US Forces Korea, are designed to "highlight the longstanding military partnership" between the two countries and improve stability and security on the Korean Peninsula.
However, the exercises usually draw a fierce response from North Korean.
The US and South Korea have maintained this year's drills will proceed as planned, despite the thawing in relations with the North.
CNN's Yoonjung Seo, Sophie Jeong, Steve George and Kevin Liptak contributed to this report.