Spain insists that NATO funding should address real threats, not arbitrary targets, in President Trump’s tariff retaliation plan.
Published October 15, 2025
The European Commission and the Spanish government have rejected US President Donald Trump’s latest threat to impose high tariffs on Madrid over the latter’s refusal to meet NATO defense spending targets.
President Trump on Tuesday said he was “very unhappy” with Spain, the only North Atlantic Treaty Organization (NATO) member to reject a new spending target of 5% of economic output, adding that he was considering punishing the Mediterranean nation.
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Trump added: “We were thinking of imposing trade sanctions through tariffs because of their actions. We may do that.” He previously suggested Spain “pay twice as much” in trade negotiations.
Trade policy falls under the authority of Brussels, and the European Commission “will, as always, respond appropriately to any measures taken against one or more member states,” European Commission spokesman Olof Gil said at a press conference on Wednesday.
The trade agreement between the European Union and the United States, signed in July, was the right basis for addressing any issues, Gill added.
Spain’s Ministry of Economy and Trade said in a statement, “The debate over defense spending is not about increasing spending for the sake of increasing it, but about responding to real threats.”
“We are doing our part to develop the necessary capabilities and contribute to the collective defense of our allies.”
Spain has more than doubled its nominal defense spending from 0.98% of gross domestic product (GDP) in 2017 to 2% this year, equivalent to about 32.7 billion euros ($3.8 trillion).
Defense Minister Margarita Robles said Wednesday’s meeting did not discuss the 5% target for 2035 because the allies prioritized the current situation in Ukraine, but did not completely rule out a change in Spain’s position.
Ignacio García Bercero, a senior fellow at Bruegel, a Brussels-based economic think tank, said it is rare for the United States to impose targeted tariffs on individual EU member states, but there is precedent.
In 1999, the United States imposed 100% punitive tariffs on products such as chocolate, pork, onions, and truffles against the EU in retaliation for the EU’s ban on imports of hormone-treated beef. However, these tariffs excluded Britain, which was still part of the trading bloc at the time.
Juan Carlos Martínez Lazaro, a professor at Madrid’s IE Business School, said the United States could impose anti-dumping penalties on European products that are mainly produced in Spain.
In 2018, Washington state imposed a combination of tariffs of more than 30% on Spanish black table olives at the request of California olive producers. Spain’s share of the U.S. market plummeted from 49% in 2017 to 19% in 2024.
Another option is to move the United States’ naval and air bases in southern Spain to Morocco, an idea proposed by former Trump official Robert Greenway, which would damage the local economy through the loss of thousands of indirect jobs.
