Trump orders halt to US trade with Spain over NATO spending

ANKARA/MADRID — U.S. President Donald Trump ordered an immediate halt to all trade with NATO ally Spain on Wednesday, sharply escalating tensions over defense spending and Spain's stance on the Iran war.

The directive came during a NATO summit in Ankara, where European leaders had hoped to ease divisions within the alliance. Instead, Trump criticized Spain as a "terrible partner" and repeated his frustration over the country's refusal to meet NATO's new defense spending target of 5% of gross domestic product (GDP).

Spanish Prime Minister Pedro Sanchez downplayed the dispute, saying he had a "very cordial" conversation with Trump during the summit.

It marked the second time Trump has instructed Treasury Secretary Scott Bessent to halt trade with Spain over its defense spending position. Trump made a similar pledge in March, but trade between the two countries continued without disruption.

Speaking alongside NATO Secretary General Mark Rutte, Trump said Spain had refused to meet alliance commitments.

"Spain doesn't agree to anything, and you shouldn't carry them," Trump said.

Rutte responded that Spain had significantly increased its defense spending to 2% of GDP last year but acknowledged that "there are still issues we have to solve."

Trump has also repeatedly criticized Spain after Sanchez declined to allow the United States to use Spanish airspace or military bases during the Iran conflict.

Trump orders trade halt

Trump directed Bessent to stop trade with Spain, saying he wanted to end commercial ties with the country.

"I don't want anything to do with Spain. Cut off all trade with Spain, please, including visits," Trump said.

A U.S. official told Reuters that the Treasury Department will work with the Commerce Department and the Office of the U.S. Trade Representative to prepare a list of Spanish products that could face embargoes in the coming days.

Trade experts said Trump could invoke the International Emergency Economic Powers Act to impose a full or partial embargo on Spanish imports.

Spain defends its NATO commitment

Sanchez later told reporters that he and Trump discussed the FIFA World Cup and golf but did not talk about defense spending.

He maintained that Spain remains a reliable NATO ally and announced that additional Spanish troops would be deployed to Finland as part of NATO's Arctic Sentry mission.

"The facts are the facts," Sanchez said, noting that Spain has been among NATO's fastest-growing military spenders over the past two years and that the country's strong economic growth has strengthened its ability to meet defense commitments.

He also emphasized that Spain and the United States have maintained strong economic ties regardless of the political leadership in either country.

Spain's government added that the country runs a trade deficit with the United States and noted that European Union trade policy prevents individual member states from negotiating separate trade arrangements.

The United States and Spain jointly operate key naval and air bases in southern Spain. Spanish officials said they were unaware of any plans by Washington to reduce its military presence and noted that investment in both facilities continues to grow.

Investment outlook remains positive

Despite Trump's latest threat, major U.S. investors continue to view Spain as an attractive investment destination.

BlackRock, the world's largest asset manager, said in its midyear investment outlook that Spain remains its preferred market for equity investments because of its strong economic performance compared with other developed economies.

The firm currently holds about €104 billion ($119 billion) in Spanish assets.

However, Spain's Economy Ministry reported that overall U.S. investment in the country declined by €1.9 billion during the first quarter.

Spain exports olive oil, auto parts, steel, chemicals and wine to the United States, although analysts say its economy is less dependent on U.S. trade than many other European countries. Spain's wine industry has already experienced weaker demand in the U.S. market, with exports declining in both value and volume in 2025, according to industry data. -Reporting by Humeyra Pamuk, Gram Slattery in Ankara, David Latona, Javi West Larrañaga, Victoria Waldersee, Aislinn Laing and Emma Pinedo in Madrid; Editing by Charlie Devereux and Andrei Khalip/Reuters