U.S. President Donald Trump on Wednesday ordered an immediate halt to all trade with NATO ally Spain, escalating tensions over defense spending and the Iran war, despite European Union rules requiring trade negotiations to be conducted collectively by the bloc.
Speaking during a NATO summit in Ankara, where European leaders had hoped to ease divisions within the alliance, Trump criticized Spain, calling it a "terrible partner." He also renewed his claim that the United States should control Greenland, prompting a response from Denmark, which said it would defend every inch of its territory.
This is the second time Trump has directed Treasury Secretary Scott Bessent to halt trade with Spain because of its refusal to support NATO's new defense spending target of 5% of gross domestic product. However, after making a similar announcement in March, trade between the two countries continued without interruption.
Trump told NATO Secretary-General Mark Rutte that Spain refuses to agree to anything and should not be supported. Rutte sought to ease the tensions by noting that Spain had significantly increased its defense spending to 2% last year, although he acknowledged that some issues remain unresolved.
Trump has also repeatedly criticized Spain after Prime Minister Pedro Sanchez, who leads a minority Socialist government, refused to allow the United States to use Spanish airspace or military bases during the Iran war.
Trump told Bessent that he did not want to continue any trade with Spain and instructed him to act immediately. He also claimed Spain earns significant income through trade with the United States and said his administration would ensure the country earns much less in the future.
In response, Sanchez's office said it viewed Trump's remarks as "business as usual" and had no plans to change Spain's "excellent" relationship with Washington.
The office also noted that Spain has a trade deficit with the United States and said trade relations are driven by private companies rather than governments. It added that, under European Union customs and trade rules, individual member states cannot be treated separately.
The United States and Spain jointly operate two key military bases in southern Spain that support naval and air operations.
When asked whether Spain had contingency plans if the United States reduced its military presence at those bases, Spanish officials said there was no indication such a move was being considered and noted that investment in both facilities continues to grow.
Jennifer Hillman, an economic law expert and former member of the World Trade Organization's Appellate Body, said in March that although it would be possible to target Spain with trade measures, doing so would be difficult. She said Trump would first need to declare a national emergency and provide evidence that Spain poses a threat to U.S. national security, foreign policy, or the economy.
Despite Trump's trade threats, major U.S. investors remain optimistic about Spain. BlackRock, the world's largest asset manager, said in its midyear report that Spain is its preferred market for equity investment because its economy is growing faster than those of most developed countries.
A BlackRock spokesperson said Spain is the firm's top global investment choice for the next six months. The company currently holds €104 billion ($119 billion) in Spanish equities, debt, private markets, and real assets.
However, according to Spain's Economy Ministry, total net U.S. investment in Spain fell by €1.9 billion in the first quarter of 2026.
Spain is the world's largest exporter of olive oil and also exports auto parts, steel, chemicals, and wine to the United States. However, analysts believe Spain is less vulnerable to Trump's trade threats than many other European economies.
