Washington escalates pressure on Spain over defense spending and its stance on Iran.
U.S. President Donald Trump on Wednesday ordered an immediate halt to trade with Spain, intensifying pressure on the NATO ally over its refusal to endorse the alliance’s new defense spending target and its opposition to supporting U.S. military operations against Iran.
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The announcement came during the NATO summit in Ankara, where Trump renewed criticism of Spain’s position on military spending and described the country as a “terrible partner.” He also reiterated his claim that the United States should control Greenland, drawing criticism from fellow NATO member Denmark.
Trade dispute tied to NATO commitments
The directive marked the second time Trump has instructed Treasury Secretary Scott Bessent to suspend trade with Spain after Prime Minister Pedro Sánchez declined to commit to NATO’s new target of spending 5% of GDP on defense. A similar order issued in March was never implemented, and bilateral trade continued uninterrupted.
Addressing NATO Secretary General Mark Rutte, Trump said: “Spain doesn’t agree to anything, and you shouldn’t carry them.”
Rutte responded by acknowledging Spain’s recent increase in military spending, saying the country “made a huge step last year” by reaching 2% of GDP, while adding that “there are still issues we have to solve.”
Trump has also repeatedly criticized Madrid after Sánchez refused to allow the United States to use Spanish airspace or military bases to launch military operations against Iran.
Speaking to Bessent, Trump said: “I don’t want to do any trade with them, alright?” After the Treasury secretary replied, “Yes, sir,” Trump continued: “Take it immediately. Don’t even talk to them. They’re hopeless. They’re bad people … They make so much money with us, and we’re going to see that they make a lot less.”
Text Reads: Trump lashes out at Spain for rejecting attacks on Iran but highlights its unity within NATO.
Spain rejects Trump’s pressure
The Spanish government dismissed Trump’s remarks, with Sánchez’s office describing them as “business as usual” and stating that it had no intention of changing the “excellent” relationship Spain maintains with Washington.
The statement also noted that Spain runs a trade deficit with the United States and stressed that commercial relations are conducted by private companies rather than governments. It further emphasized that, as a member of the European Union’s customs union, Spain cannot be singled out in trade negotiations.
Speaking to reporters after the NATO summit, Sánchez said: “Relations between the United States and Spain are very positive relations in social, cultural, economic and also political terms.”
Military cooperation remains unchanged
Despite the diplomatic dispute, military cooperation between the two countries remains in place. The United States and Spain jointly operate two major military bases in southern Spain that support naval and air operations.
Spanish officials said earlier this week there was no indication that Washington was considering reducing personnel or military assets at either base, adding that investment at both facilities continues to increase.
Jennifer Hillman, an economic law expert and former member of the World Trade Organization’s Appellate Body, said in March that targeting Spain alone would be legally possible but difficult. According to Hillman, Trump would need to declare a national emergency and demonstrate that Spain poses a threat to U.S. national security, foreign policy or the economy.
U.S. investment continues
Despite Trump’s threats, major U.S. investors have continued to express confidence in Spain.
BlackRock identified Spain as its preferred market for equity investment in its mid-year report, citing stronger economic growth than most developed economies. The asset manager said Spain will remain its primary global investment focus over the next six months and currently holds €104 billion (US$119 billion) in Spanish equities, debt, private markets and real assets.
Spain’s Economy Ministry, however, reported that net U.S. investment in the country declined by €1.9 billion during the first quarter of 2026.
Spain is the world’s largest exporter of olive oil and also ships auto parts, steel, chemicals and wine to the United States. Analysts nevertheless consider the Spanish economy less exposed to potential U.S. trade retaliation than several other European economies.
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