Trump tends to look at everything as a zero-sum game. In this world view, no one can succeed, no one can progress, without it hurting us. Just like his ignorance of what a trade deficit is guides his "policies" as regards tariffs and trade agreements, his ignorance of how the North Atlantic Treaty Organization (NATO) is funded and even what NATO is shapes his fumbling foreign "policy". (I have been putting "policy" in quotes, since I don't believe that Trump has policies, since that would imply that he thinks about what he does). NATO is a group of allied nations whereby the members agree to come to each others' aid if one of them is attacked. There are two funding streams of funding for NATO operations. One is not really funding of NATO per se, but involves the total military budgets for the member nations. Each NATO country has pledged to reach a goal of 2% of GDP for their military budgets. This does not mean that 2% of a nation's GDP is dedicated for exclusively for NATO operations, but is for their total military budget. This is not money paid to NATO. Trump, in (correctly) pointing out that some countries are not meeting this goal, (incorrectly) claims that this is money that is owed to either NATO or to the United States (it's unclear which). He also claims that we are carrying the other NATO nations because our military budget, as a percentage of our GDP is around 4%. This is not the percentage that goes to NATO operations, but our total military budget, which involves a presence all over the world. There is also a budget for NATO administration, i.e. offices etc, where the United States contributes, by agreement, 22% of the total. This amount is based on comparative GDP among the member nations.
Not only does Trump think that our allies are screwing us financially, but believes that they are depending on us to defend them so that they can spend on "socialism"...or something. What he doesn't realize is that the resources that we spend on helping to defend other countries benefits us in the long term. If other countries are destabilized, or are sunk in poverty or war, then this causes a surge in refugees and disruption in trade. it is in our best interest to help ensure that the world is a peaceful and prosperous place. But Trump's version of "America First" is that we can somehow build an impenetrable wall around America and isolate ourselves from the problems of the rest of the world.
Central to Trump's relations with other nations is his tendency to turn everything into a financial transaction. In Trumpworld everybody, every nation, is trying to screw the United States and take advantage of us. His "policy" seems to be "Fuck you, we're America, kiss our ass". He insults the heads of state for no good reason (while kissing up to dictators like Putin and Kim), he unilaterally withdraws from international agreements that took years of patient negotiating to reach, he refuses to work with other nations unless the terms are completely beneficial to the U.S. - in the process he has turned this nation into an untrustworthy partner on the international stage.
His "Fuck you, we're America" way of dealing with our allies takes on a different tone when it comes to dealing with our adversaries. He threatens other nations with "fire and fury", and promises to devastate other countries with our military, yet, when push comes to shove, he backs down. Other than the questionable assassination of an Iranian general, his threats are usually empty threats and our enemies have come to recognize that.
As with so many other areas, Trump shoots from the hip and demonizes his own military, diplomatic and intelligence agencies. The result has been that, rather than America being feared and respected, we have become an international joke and known for breaking our promises.
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