President Donald Trump announced that Spain has agreed to increase its payments after he threatened a complete trade embargo during the NATO summit in Ankara on July 8. The threat, which included directing Treasury Secretary Scott Bessent to halt all trade and tourism with Spain, represents the latest instance of Trump wielding economic pressure to reshape alliance dynamics.
Trump reportedly labeled Spain a “wasted cause” in NATO collaboration, pointing to what he views as insufficient defense spending. Spain’s 2026 defense budget sits at approximately €35.41 billion, roughly 2% of GDP. Trump has been pushing NATO allies to spend 5% of GDP on defense, more than double Spain’s current commitment.
A familiar playbook with familiar results
This is not the first time Trump has pointed the trade cannon at Madrid. Similar threats surfaced in October 2025 and again in March 2026. Neither resulted in actual changes to trade relations between the two countries.
Spanish Foreign Minister José Manuel Albares has denied any shift in policy despite Trump’s latest ultimatum. That creates an interesting disconnect between Trump’s claim that Spain “agreed to pay more” and what Spanish officials are actually saying on the record.
