Trump threatens to double tariffs on Spain amid Nato spending clash

US President Donald Trump on Wednesday threatened to double tariffs on Spain, citing Madrid’s reluctance to match the 5 percent defence spending pledge made by other Nato members.

At a press conference following the end of the annual Nato summit in the Netherlands, Trump criticised Spain's refusal to invest 5 percent of its GDP on defence, stating that he would negotiate directly with Spain and even suggesting the imposition of further tariff measures to make up the difference.

“We’re going to negotiate a trade agreement with Spain so that they pay double,” warned the US President, adding that it is “the only country out of all the others that refuses to pay.”

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Reports in the Spanish press suggest this could come at the end of the 90-day grace period granted by Trump for reciprocal tariffs in July.

“I don’t know what the problem is,” he added. “It’s too bad. So we will make it up. We are negotiating with Spain on a trade deal and we are going to make them pay twice as much. I am actually serious about that.”

Spain is a “great place and a great people”, Trump went on to say. “They will have to pay it back to us on trade because I’m not going to let that happen. It’s unfair.”

Trump also spoke of Spain’s economy, which has performed unusually well in the post-pandemic period compared to other Western economies. That progress, he hinted, could be undone by tariff measures.

“What they have done is tremendous, really. They are the only country that is going to stay at 2 percent. Their economy is doing very well and could be wiped out if that happens,” Trump said.

Nato leaders committed at the summit in The Hague to reaching the 5 percent spending target by 2035. The text was softened after Sánchez last week expressed his refusal to meet the goal, and the Spanish Prime Minister has claimed that, even with a smaller budget, Spain is capable of meeting the military objectives set by Nato.

Spanish scepticism towards defence spending can be in part explained by geography, both in terms of physical distance from Russia but also natural defences like mountain ranges and coastal cover, but also due to the fact the Sánchez government is one of the few left-leaning governments on the world stage.

Spain has, for example, been particularly vocal on the Middle East crisis and recognised the Palestinian state last year, and Sánchez has questioned increased military spending at the expense of the welfare state.

Sánchez previously claimed that he had managed to reach an agreement with Nato Secretary General Mark Rutte to be exempt from the 5 percent target, at least in the short-term future. Rutte rejects this. There will be another spending review in 2029.

For now it seems that Trump wants Spain to pay for it through any means necessary. However, it’s far from clear if the US can levy specific tariffs against Spain. Spain’s Economy Minister Carlos Cuerpo has reiterated that the European Union is a customs union and that it will be Brussels that negotiates with the US, rather than directly with Sánchez or Spain as Trump suggested.

At the summit, Sánchez avoided greeting Trump and in the global leaders' photo he was conspicuously to the side, appearing isolated.

However, though most international leaders would fear a war of words with the US President, Sánchez’s uncomfortable domestic political context means that the Spanish Prime Minister may actually welcome an international distraction.

With his inner-circle engulfed in corruption scandals, Sánchez will likely be grateful for some political oxygen by being abroad and talking about something other than criminal allegations against his government.

He’s also keen to be seen by his left-wing allies, namely coalition partner Sumar, but also Podemos and Esquerra Republicana de Catalunya, as pushing an anti-Nato stance in order to shore up support and weather the storm of scandals in the face of any potential confidence vote against him.

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