President Trump told Treasury Secretary Scott Bessent to immediately halt all US trade with Spain on July 8, citing the country’s persistent underspending on NATO defense commitments. The move, announced during a NATO summit, escalates what has become one of the most aggressive uses of trade policy as a foreign policy weapon in modern alliance history.
Trump labeled Spain a “terrible partner” and a “wasted cause,” directing that the freeze cover all trade, visits, and business dealings.
What actually happened
The immediate trigger was twofold. Spain has long ranked among the lowest defense spenders in NATO, falling well short of even the traditional 2% of GDP guideline that most members have struggled to meet. Trump has pushed for a far more ambitious 5% target, a number that would require most European nations to essentially double or triple their military budgets.
On top of the spending shortfall, Spain reportedly refused to allow US aircraft to use Spanish bases for operations related to Iran. That combination, chronic underspending plus an active denial of military cooperation, apparently crossed a line for the administration.
