Trump orders trade halt with Spain; Madrid shrugs off threat as ‘business as usual’

US President Donald Trump on Wednesday ordered an immediate halt to all trade with Nato ally Spain, escalating tensions over defence spending and disagreements linked to the Iran conflict, despite European Union rules that require trade negotiations to be conducted collectively by the bloc.

The remarks came during a Nato summit in Ankara, where European leaders had hoped to ease divisions within the alliance.

Instead, Trump renewed his criticism of Spain and also sparked concern in Denmark by reiterating his view that the US should control Greenland. Denmark responded by pledging to defend every part of its territory.

The latest order marked the second time Trump has directed Treasury Secretary Scott Bessent to stop trade with Spain over Madrid’s refusal to commit to Nato’s new defence spending target of 5 per cent of GDP.

More from World

However, after a similar threat in March, trade between the two countries continued without disruption.

"Spain doesn't agree to anything, and you shouldn't carry them," Reuters quoted Trump as telling Nato Secretary General Mark Rutte.

Rutte sought to defuse the situation, noting that Spain "made a huge step last year" by increasing defence spending to 2 per cent of GDP, while acknowledging that "there are still issues we have to solve".

"I don't want to do any trade with them, alright?" Trump said, turning to Bessent, who replied: "Yes, sir."

Trump then added, "Take it immediately. Don't even talk to them. They're hopeless. They're bad people ... They make so much money with us, and we're going to see that they make a lot less."

Spain's response

The office of Spanish Prime Minister Pedro Sanchez said it viewed Trump's comments as "business as usual" and had no plans to alter what it described as the "excellent" relationship with Washington.

The statement also noted that Spain runs a trade deficit with the US and stressed that commercial ties are driven by private companies rather than governments.

It further pointed out that, as part of the EU customs and trade union, individual member states cannot be targeted separately in trade negotiations.

Trump's criticism of Spain has intensified in recent months after Sanchez, a Socialist leader heading a minority government, declined to allow the US to use Spanish airspace or military bases during operations linked to the Iran war.

The two countries jointly operate key naval and air facilities in southern Spain.

Spain is the world's largest exporter of olive oil and also exports auto parts, steel and chemicals to the US.

However, analysts say the Spanish economy may be less exposed to potential US economic retaliation than some other European countries.

With inputs from agencies