President Trump ordered his Treasury Secretary Scott Bessent to cut off all trade with Spain at the NATO summit in Ankara on July 8, citing Madrid’s refusal to meet the alliance’s defense spending targets and calling the country a “terrible partner.”
“Spain is a terrible partner in NATO. They don’t participate. They don’t pay. I don’t want anything to do with Spain. Cut off all trade with Spain, please, including visits,” Trump said at a press conference alongside NATO Secretary General Mark Rutte.
Spain stands alone among NATO’s 32 members as the only country that has not committed to spending 5% of its gross domestic product on defense by 2035, according to NATO records. At the 2025 NATO summit in The Hague, all other allies pledged to meet this target, but Spain secured a carve-out agreement and refused to sign on.
Spain’s defense spending has climbed to 2.1% of GDP in 2025, up from 1.4% in 2021, according to data from the Stockholm International Peace Research Institute. Rutte interjected during Trump’s remarks to note Spain’s progress. “You got Spain to pay 2%. They spent, they made a huge step in last year,” the NATO chief said.
Trump has repeatedly targeted Spain over its defense spending record. In June 2025, he threatened a tough trade deal for Spain over the same issue, describing the country’s refusal to commit to higher targets as “terrible.” His comments today mark an escalation of that earlier conflict, moving from threats to a direct order to his Treasury Secretary.
The Spanish stock market reacted sharply to Trump’s announcement. The IBEX 35 equity index fell more than 1%, while the yield on Spain’s benchmark 10-year government bond rose 7 basis points to 3.5408%, according to CNBC data. Spanish bonds had already been selling off before the press conference.
The Spanish Prime Minister’s Office dismissed Trump’s comments as routine, telling Reuters that bilateral relations between the U.S. and Spain remained beneficial to both countries in trade and defense. Spain’s government has previously argued that a 5% defense spending target would be disproportionate and unnecessary for its security needs.
Sources
- CNBC — Trump’s direct quotes at the press conference, Spain’s 2025 defense spending figure (2.1% of GDP), market reaction data on IBEX 35 and Spanish bond yields
- Reuters — Trump’s trade cutoff order and direct quotes, NATO summit location and date, Spanish government response
- TVP World — Confirmation that Trump ordered Treasury Secretary Scott Bessent to cut off trade with Spain
- NATO official website — Confirmation that Spain is the only NATO member not to commit to 5% defense spending target by 2035, and that the 2025 NATO summit in The Hague established this commitment
- Stockholm International Peace Research Institute — Spain’s defense spending data: 1.4% in 2021 and 2.1% in 2025
