Trump wants to cut trade with Spain: the reasons go beyond NATO's defence spending

US President Donald Trump has reignited his long-running dispute with Spain, threatening to cut off trade with the country over its refusal to back NATO's new defence spending target even as he broadened his criticism of European allies over their stance on the recent conflict with Iran.

Speaking to reporters ahead of a meeting with NATO leaders in Ankara on Wednesday, Trump singled out Spain, calling it "a wasted cause" and suggesting the United States should halt trade with the country.

"I didn't speak to Spain. Spain is a wasted cause. We don't want to do any trade business with Spain anymore," Trump said.

"By the way, I'd like you to cut it off," he added, appearing to address US Treasury Secretary Scott Bessent.

The remarks revive tensions that first surfaced at last year's NATO summit, where Spain became the only alliance member to refuse to endorse the bloc's goal of raising defence spending to 5% of gross domestic product by 2035.

The decision angered Washington, with Trump repeatedly warning Madrid that it could face trade consequences.

Iran disagreement deepened rift

The dispute between the two countries has expanded beyond defence spending following the US and Israeli military strikes on Iran earlier this year.

Spanish Prime Minister Pedro Sánchez emerged as one of the few European leaders to openly criticise the attacks, distancing Madrid from Washington's position.

"We reject the unilateral military action by the United States and Israel," Sánchez wrote on X shortly after the strikes, warning that they risked triggering an escalation that could create a more hostile international order.

The following day, Sánchez reiterated his opposition to Iran's government but maintained that the military campaign was "an unjustified and dangerous military intervention."

Spain also denied the United States access to its military bases for operations linked to Iran, even as other European governments avoided publicly criticising the Trump administration and offered limited logistical support.

Trump responded by threatening to cut off trade with Spain even then, although it still remains unclear how such a move could be implemented given Spain's membership of the European Union.

Sánchez appeared unfazed by the threat.

"We are not going to be complicit in something that is bad for the world and is also contrary to our values and interests, just out of fear of reprisals from someone," he said in a televised address.

Even after Washington and Tehran agreed to a temporary ceasefire in April, the Spanish leader maintained his criticism.

"The government of Spain will not applaud those who set the world on fire just because they show up with a bucket," Sánchez wrote on X.

Political differences extend beyond foreign policy

The disagreements reflect broader ideological differences between Trump and Sánchez.

According to an article in The New Yorker, Sánchez has increasingly emerged as one of Trump's most visible political opponents in Europe.

The publication noted that while Trump has dismissed renewable energy initiatives introduced during former President Joe Biden's administration, Sánchez has overseen a doubling of Spain's solar and wind energy production since 2019.

The article also contrasted Trump's hardline immigration policies with Spain's efforts to regularise the status of around half a million undocumented migrants.

It further pointed to Trump's scepticism toward multilateral institutions, while Sánchez has defended the United Nations and declined an invitation to join Trump's proposed "Board of Peace" initiative.

Those policy differences have increasingly placed Spain at odds with Washington on issues extending well beyond defence.

Why Trump cannot target Spain independently

Trump's latest threat also raises practical questions because Spain cannot negotiate trade independently from the European Union.

Trade policy for all 27 EU member states is handled collectively by the European Commission, meaning any changes to US-Spain trade relations would inevitably involve the broader bloc.

Responding to Trump's comments, European Commission spokesman Olof Gill said Brussels expected Washington to honour existing commitments.

"We expect the US to honor its commitments under that joint statement, as we have honored ours," Gill said during a press briefing.

"The Commission will always ensure that the interests of the European Union and all our member states are fully protected."

Analysts noted that any attempt to selectively impose trade restrictions on Spain would likely face legal and diplomatic hurdles because of the EU's unified trade framework.

Trump broadens criticism of Europe

Trump's comments on Spain came as he launched a wider attack on several European allies during the second day of the NATO summit.

The US president again argued that America bears a disproportionate share of NATO's security burden and criticised European members for failing to support US military operations against Iran.

"I’m very upset with Nato, that we pay far, far too much," he said.

"Billions and billions of dollars, too much, because it’s unfair, because we’re protecting them, so we protect them, but they’re not there for us."

His remarks came despite last year's agreement by all NATO members except Spain to increase defence spending to 3.5% of GDP by 2035, a move intended to bring European and Canadian military spending closer to US levels.

He referred to Spain as well as France, Germany, Italy and Britain while accusing European governments of failing to stand with Washington.

Trump also reportedly described Spaniards as "hopeless, bad people."

He complained that alliance members "didn’t want to help us with the number one state sponsor of terror, that’s Iran," referring to the refusal of most European countries, except the United Kingdom, to allow the United States to conduct bombing missions from European air bases.