Spain could face tariffs or other trade retaliation over its refusal to join other NATO partners in raising defense spending.
President Donald Trump has attacked the country multiple times in recent days, and now says he could start a trade war with Spain if it doesn’t comply with his wishes.
“I think Spain’s terrible what they’ve done, they are the only country that won’t pay 5%,” Trump said during a NATO summit press conference in the Netherlands.
“Spain is the only country out of all of the countries that refuses to pay,” Trump continued. “They want a little bit of a free ride, but they’ll have to pay it back to us on trade, because I’m not going to let that happen. It’s unfair. It’s unfair to NATO.”
President Trump rips into Spain for refusing to increase NATO spending.
“I think Spain’s terrible what they’ve done, they are the only Country that won’t pay 5%” pic.twitter.com/WD5JGnc2WU
— Media Research Center (@theMRC) June 25, 2025
Trump challenged NATO allies to reach a 5% defense spending pledge, meaning they spend at least 5% of their gross domestic product on military expenditures. Within that figure, 3.5% would be spent on “hard defense” capabilities, with the remaining 1.5% spent on other security needs, including so-called “resilience” costs, such as infrastructure projects that can withstand the weight of military equipment.
Estonia, Greece, Poland, Turkey, and the United States are already close to spending 3.5% of their GDP on hard defense capabilities. However, Spain drew Trump’s ire after its prime minister, Pedro Sanchez, undermined the 3.5% figure, saying his country “cannot commit to a specific spending target in terms of GDP.”
“NATO is going to have to deal with Spain,” Trump said last week. “Spain has been notorious for low pay.”
He previewed the consequences for Spain if it stayed at 2% rather than committing to 5%.
“They’re doing very well. The economy is very well,” Trump added. “And that economy could be blown right out of the water with something bad happening.”
He then upped the pressure.
“We’re negotiating with Spain on a trade deal,” Trump said. “We’re going to make them pay twice as much. And I’m actually serious about that.”
After pausing his “Liberation Day” tariffs, Trump set a July 9 deadline to reach trade deals with more than 80 countries. His staff is doing much of the work on that front, but Trump pledged to work directly with Spain.
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“I’m going to negotiate directly with Spain,” Trump said. “I’m going to do it myself. They’re going to pay. They’ll pay more money this way. You (the reporter) should tell them to go back and pay.”
The U.S. enjoys a trade surplus with Spain, according to the U.S. Census Bureau. While that fact would not prevent Trump from imposing tariffs or other measures against the country, it does mean that exporting businesses could see losses if new barriers are erected around the Spanish market.
