U.S. President Donald Trump on Wednesday ordered Treasury Secretary Scott Bessent to immediately halt all trade with Spain, citing the NATO ally's refusal to commit to the alliance's new defense spending target of 5% of GDP during a summit in Ankara that was meant to unify the military bloc.
It's the second time Trump has issued such an instruction. After his first promise in March, trade between the two countries continued normally. This time, Trump's directive came with sharper language and a direct command to Bessent: "Take it immediately. Don't even talk to them. They're hopeless. They're bad people."
The NATO Spending Dispute
The confrontation unfolded during a NATO summit European leaders had hoped would ease rifts within the alliance. Instead, Trump reignited the dispute with Spain while also irritating Denmark by reiterating his position that the U.S. should control Greenland. Denmark promised to defend every inch of its territory.
"Spain doesn't agree to anything, and you shouldn't carry them," Trump told NATO Secretary General Mark Rutte. "I don't want to do any trade with them, alright?" When Bessent replied "Yes, sir," Trump continued: "They make so much money with us, and we're going to see that they make a lot less."
Rutte attempted to defuse tensions by noting Spain "made a huge step last year" by raising its spending to 2%, though he acknowledged "there are still issues we have to solve." The gap between Spain's current 2% and NATO's new 5% target represents a substantial shortfall that Trump has consistently criticized.
Spain's Response and EU Trade Rules
The office of Spanish Prime Minister Pedro Sanchez, who leads a minority leftist government, said it was treating Trump's statements as "business as usual" and wouldn't change the "excellent" relations it enjoyed with Washington. The statement pointed out Spain has a trade deficit with the U.S. and that economic ties are forged by private companies rather than governments.
Spain also noted that as part of the customs and trade union, individual EU members can't be singled out. European Union rules require trade negotiations to be conducted as a single bloc, raising questions about the legal mechanism through which Trump's order could be implemented.
Military Bases and Iran War Tensions
Trump has repeatedly expressed frustration with Spain after Sanchez, a Socialist, refused to let the U.S. use its airspace or bases on its territory for the Iran war. Washington jointly operates with Madrid two key military bases in southern Spain for naval and air operations, making the relationship strategically significant beyond trade considerations.
Spain is the world's largest olive oil exporter and also sells auto parts, steel, and chemicals to the United States. Analysts consider it less vulnerable to Trump's threats of economic punishment than other European economies, though the trade relationship remains substantial.
Why This Matters:
The confrontation exposes fundamental tensions between burden-sharing expectations and alliance cohesion within NATO. Trump's insistence that allies meet the new 5% defense spending target reflects a transactional approach to security commitments that prioritizes fiscal equity over diplomatic niceties. Spain's refusal to support U.S. operations in the Iran war while benefiting from American military protection through NATO raises legitimate questions about reciprocity in the alliance. The dispute also highlights the practical limits of presidential trade directives when they conflict with EU trade law and existing commercial relationships driven by private enterprise rather than government diktat. Whether Trump's order produces actual policy changes or remains rhetorical pressure remains unclear, given the continuation of normal trade after his March directive.