U.S. President Donald Trump on Tuesday threatened trade penalties, including tariffs, against Spain, saying he is unhappy with its refusal to raise defense spending to 5% and calling the move disrespectful to NATO, while Madrid warned such a policy would cost American citizens.
Members of the security alliance agreed in June to sharply increase their military spending to 5% of gross domestic product (GDP), delivering on a major priority for Trump, who wants Europeans to spend more on their own defense.
At the time, Trump said he could consider punishing Madrid on trade for resisting the new target.
He repeated that threat on Tuesday.
"I'm very unhappy with Spain. They're the only country that didn't raise their number up to 5%... so I'm not happy with Spain," Trump told reporters at the White House. "I was thinking of giving them trade punishment through tariffs because of what they did, and I think I may do that," he added.
On Wednesday, Spain's Deputy Prime Minister Yolanda Diaz said the "intended punishment" the U.S. president wants to impose will be "very costly" for the Americans.
"Spain's trade balance with the U.S. is in deficit, meaning these policies are going to hurt the Americans," she warned, as quoted by the country's public broadcaster RTVE.
Science Minister Diana Morant said Trump is "regular in making certain statements," but that the important thing is that "the other day with (Prime Minister Pedro) Sanchez, he was quite cordial."
Trump has cast doubt on Washington's willingness to come to the aid of NATO members who do not spend enough.
He said last week, while meeting Finland's president, that NATO should consider throwing Spain out of the alliance over its refusal to agree to the new commitment.
Spain is a reliable member of the alliance and currently has 3,000 soldiers deployed under NATO, Spanish Foreign Minister Jose Manuel Albares said on Wednesday when asked about Trump's comments.
"There is no doubt about Spain's commitment and contribution to (transatlantic) security," he told reporters during a visit to Hangzhou, China.
Citing the great threat posed by Russia since its 2022 invasion of Ukraine, NATO members have argued that their previous spending commitment of 2% of GDP is no longer sufficient.
Spain was the only member of the 32-nation alliance not to commit to increasing military spending to 5% of GDP.
Prime Minister Sanchez secured a last-minute exemption at the time, saying Spain would only spend up to 2.1%, which he called "sufficient and realistic."
Madrid, which joined the North Atlantic Treaty Organization in 1982, has argued it compensates for the lower spending with strong troop contributions to NATO missions, including deployments in Latvia, Slovakia, Romania, Bulgaria and Türkiye.
