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US President Donald Trump claimed Spain had backed down after he threatened to halt trade with the Nato ally, saying Madrid agreed to make additional payments following a sharp public confrontation over defence spending and the Iran conflict at the alliance’s summit.
Speaking to reporters aboard Air Force One as he returned to Washington, Trump said his pressure campaign had forced Spain to change its position.
“I did have issues, and I still do. But Spain came back all the way today,” Trump said. “I told him I’m going to stop trading. They made, they honored a request for lots of payment, and if they didn’t, we wouldn’t even talk to them.”
Trump, however, did not specify what payments he was referring to or identify the Spanish official with whom he had reached the understanding.
His remarks followed an extraordinary day of tensions at the Nato summit, where Trump repeatedly criticised Spain for refusing to match the alliance’s proposed defence spending target and for declining to support the recent US and Israeli military campaign against Iran.
Earlier during a meeting with Nato Secretary General Mark Rutte, Trump called Spain “a wasted cause” and threatened to sever commercial ties with the country.
“We don’t want to do any trade business with Spain anymore,” he said.
US weighs embargo on Spanish products
The latest comments came as the Trump administration reportedly began exploring trade measures against Spain.
According to Reuters, Trump instructed Treasury Secretary Scott Bessent to stop trade with Spain, while US agencies, including the Treasury Department, Commerce Department and the Office of the US Trade Representative, are preparing a list of Spanish products that could face an embargo if the president decides to follow through.
The Wall Street Journal earlier reported that US officials had been asked to identify Spanish exports that could be targeted.
It marks the second time this year that Trump has threatened to suspend trade with Spain over disagreements within Nato. A similar warning issued in March never translated into actual restrictions, with bilateral trade continuing normally.
Trade experts say any unilateral embargo would face legal and diplomatic challenges because European Union trade policy is negotiated collectively rather than by individual member states. Analysts also note that Trump would likely need to invoke emergency powers to justify restrictions on imports from a Nato ally.
Spain dismisses pressure campaign
Spain responded calmly to Trump’s remarks, insisting that relations between the two countries remained strong.
A spokesperson for the Spanish government said Madrid viewed the comments “calmly and as a matter of course” and stressed that the United States and Spain continued to enjoy an “excellent” relationship.
The spokesperson also noted that the United States currently runs a trade surplus with Spain, undermining Trump’s argument for punitive trade measures.
Prime Minister Pedro Sánchez, who has emerged as one of Trump’s most outspoken European critics, also sought to downplay the confrontation.
Sánchez said he had a “very cordial” conversation with Trump during the Nato summit but insisted the discussion centred on football and golf rather than defence spending.
“The facts are the facts,” Sánchez told reporters, reiterating that Spain remained a reliable Nato ally.
He announced that Spain would deploy additional troops to Finland as part of Nato’s Arctic Sentry mission while maintaining that Madrid had already fulfilled its defence commitments.
Defence spending at heart of dispute
The latest clash reflects growing divisions within Nato over military spending.
Spain increased defence expenditure from 1.42 per cent of gross domestic product in 2024 to 2 per cent in 2025 but has refused to commit to the alliance’s new target of 5 per cent of GDP, arguing that spending slightly above 2 per cent is sufficient to meet its obligations.
Trump has repeatedly accused Spain of failing to contribute its fair share and has also criticised Sanchez’s refusal to allow US forces to use Spanish airspace and military bases during operations linked to the Iran conflict.
While several European leaders have sought to avoid direct confrontations with Trump, Sanchez has taken a more defiant approach, with his criticism of the US president often resonating with domestic audiences.
Investment ties remain resilient
Despite Trump’s latest threats, economic ties between the two countries remain substantial.
Spain exports olive oil, wine, chemicals, steel and automobile components to the United States, although economists say the Spanish economy is less dependent on the US market than many of its European peers.
Spanish officials also pointed out that EU customs rules prevent Washington from negotiating separate trade arrangements with individual member states.
Meanwhile, major American investors continue to express confidence in Spain. Asset management giant BlackRock recently described Spain as its preferred developed-market destination for equity investments, citing its stronger-than-expected economic growth.
With inputs from agencies.
