Trump orders end to US-Spain trade over NATO spending row
The US president has instructed his treasury secretary to sever all economic ties with Spain, threatening significant transatlantic trade disruption in a dispute over Madrid's refusal to meet NATO defence spending targets.
Donald Trump has publicly ordered Treasury Secretary Scott Bessent to sever all economic ties with Spain, instructing him to "cut off all trade with Spain, please, including visits." The directive was issued during a joint press conference with NATO Secretary-General Mark Rutte at the alliance's summit in Ankara.
For European markets, the threat injects fresh volatility into transatlantic trade relations at a time when investors are already navigating heightened geopolitical risks. Spain is a major European economy and a significant US trading partner. Any actual suspension of commerce would immediately disrupt cross-Atlantic supply chains, hitting exporters in sectors from agriculture to automotive manufacturing.
The trigger for the attack is Madrid’s refusal to adopt NATO’s new baseline defence spending target. Last year, 32 allies agreed to commit 5 percent of their GDP to the alliance by 2035. Spanish Prime Minister Pedro Sanchez secured a specific exemption, capping his country's contribution at 2.1 percent of GDP, a level he called "sufficient and realistic."
The attack echoes criticism Trump levelled at Spain during an Oval Office meeting with Rutte on June 24, where he also singled out Madrid for declining to support US military action against Iran. He framed the Ankara trade threat as leverage to force a reversal on defence spending. "Watch them come running back. They’ll come running back," he said, dismissing Spain as a "wasted cause," a "horror show," and "a terrible partner in Nato" that expects a "free ride."
The Spanish government signalled it would not escalate the rhetoric. Sanchez’s office stated the comments would be treated as "business as usual," emphasising that Spain "has strong social, cultural, and economic ties with the U.S., and we do not plan to change this." Rutte attempted to defend Spain during the press conference, but Trump appeared unmoved.
The outburst against Spain occurred alongside a sharp escalation in Middle Eastern tensions that further clouds the global economic outlook. Trump announced that a memorandum of understanding with Iran was "over," calling its leadership "sick people." This followed new US military strikes and the revocation of an Iranian oil licence after attacks on three tankers in the Strait of Hormuz, a critical shipping chokepoint for global energy markets.
