Trump directs U.S. officials to 'cut off all trade' with Spain over defence-spending row
- On July 8, President Donald Trump told U.S. officials in Ankara to “cut off all trade” with Spain after a dispute over NATO spending. - Trump called Spain “a terrible partner in NATO,” but EU law gives Brussels, not Madrid, authority over the bloc’s common trade policy. - Any formal U.S. trade action would likely emerge through the White House, Treasury or USTR, with Brussels and Pedro Sánchez watching.
President Donald Trump said on July 8 that he had ordered U.S. officials to cut off all trade with Spain, escalating a dispute with a NATO ally during the alliance’s summit in Ankara, Turkey. Trump tied the threat to Spain’s defense spending and to grievances over Iran, according to CNBC, Politico and other reports. Spain was already at odds with Washington over NATO’s 2035 spending target, which the alliance says calls for 5% of GDP annually on defense and related security spending. Trump made the remark publicly, saying, “Spain is a terrible partner in NATO,” and adding that he did not want to do more trade with the country. Reuters reported that he ordered an immediate halt to all trade with Spain, while Politico said the confrontation revived a feud that dates to last year’s NATO arguments over military spending. Spain’s Prime Minister Pedro Sánchez later described his conversation with Trump at the summit as “very cordial,” according to USA Today. (cnbc.com) ### Why did Spain become Trump’s target at the summit? Spain was the only NATO ally refusing to endorse the new 2035 target of spending 5% of GDP on defense, Politico reported. NATO says the commitment adopted at the 2025 Hague summit includes 3.5% of GDP for core defense requirements and 1.5% for related security spending. Analysts at the Atlantic Council said Spain stood apart from the rest of the 32-member alliance when it resisted that goal. (usnews.com) Pedro Sánchez said before the summit that Spain had secured flexibility on the target and would spend 2.1% of GDP on defense, “no more and no less,” according to reporting that cited his remarks. That position put Madrid on a collision course with Trump, who has repeatedly pressed allies to raise military spending faster. (politico.eu) ### Can Washington actually cut off trade with Spain alone? EU law gives the European Union, not individual member states, authority over the bloc’s common commercial policy. EUR-Lex describes trade policy as an exclusive EU competence under Articles 3 and 207 of the Treaty on the Functioning of the European Union. Politico said that makes any bilateral U.S. attempt to sever trade with Spain legally and practically difficult. (eunews.it) The New York Times said a move aimed only at Spain would face political, legal and practical obstacles and would probably provoke a wider clash with the European Union. Euronews, in a separate analysis, said the question is whether Washington could go beyond tariffs to target a single EU member when trade policy is handled at the bloc level. (eur-lex.europa.eu) ### How much trade is actually at stake? U.S. government and public trade trackers show Spain is not a minor commercial partner. USAFacts, citing BEA data, said the United States traded $74.5 billion in goods and services with Spain in 2025, ranking Spain as the 23rd-largest U.S. trading partner. U.S. Census Bureau data also shows continuing goods trade with Spain in 2026. (nytimes.com) April 2026 trade data compiled by the Observatory of Economic Complexity showed the United States exported about $1.93 billion to Spain and imported about $1.94 billion, with crude petroleum, petroleum gas and vaccines among major U.S. exports and paintings, electrical transformers and packaged medicaments among major imports. ### What happens next if Trump wants to turn the threat into policy? (usafacts.org) Any formal U.S. action would likely have to come through the White House, the Treasury Department or the Office of the U.S. Trade Representative, rather than through a summit-stage instruction alone. USTR’s public record shows tariff and trade actions are typically implemented through executive actions, negotiated frameworks, agency statements and Federal Register notices. (oec.world) Brussels would also be part of any next step because the European Commission negotiates trade policy on behalf of the EU, according to official EU legal summaries and member-state guidance pages. That means the next concrete sign of escalation would be a written U.S. trade measure or an EU response from the Commission, not Trump’s remark by itself. (eur-lex.europa.eu) (ustr.gov)
