U.S. President Donald Trump on Wednesday ordered an immediate suspension of trade with NATO ally Spain, intensifying tensions over defence spending and the Iran war, despite European Union rules that require trade negotiations to be handled collectively by the bloc.
Speaking at a NATO summit in Ankara, where European leaders had hoped to ease divisions within the alliance, Trump renewed his criticism of Spain, calling it a “terrible partner.” He also repeated claims involving Greenland, though he later struck a more conciliatory tone, saying the summit had shown “love” and “a lot of unity.”
Spanish Prime Minister Pedro Sanchez played down the rift and said he had a “very cordial” conversation with Trump during the summit.
It was the second time Trump has instructed Treasury Secretary Scott Bessent to halt commerce with Spain over its refusal to commit to NATO’s new defence spending target of 5% of GDP. However, after his first such promise in March, trade between the two countries continued normally.
Sanchez Says Spain Is A Reliable NATO Ally
Spanish Prime Minister Pedro Sanchez said his talks with Trump focused on topics including the World Cup and golf, but not defence spending. He defended Spain’s record as a NATO ally, citing increased military spending and a new troop deployment to Finland for NATO’s Arctic Sentry mission.
Sanchez said U.S.-Spain economic ties remain strong and are driven largely by private companies, while EU rules prevent Washington from targeting individual member states in trade matters. Officials said there were no signs the U.S. planned to reduce its military presence at joint bases in Spain, where investment is increasing.
Experts said imposing separate penalties on Spain would be difficult and would require a U.S. national security justification.
Major U.S. Investors Enthusiastic About Spain
Despite Trump’s trade threats, major U.S. investors remain bullish on Spain. BlackRock named Spain its “preferred country for equity exposure,” citing strong economic growth, and holds €104 billion ($119 billion) in Spanish assets.
However, overall U.S. investment in Spain fell by €1.9 billion in the first quarter. Spain exports olive oil, auto parts, steel, chemicals and wine to the U.S., though analysts say it is less dependent on American trade than many European economies. Wine exports also declined in 2025 amid a tougher U.S. market.
(With inputs from Reuters)
