Trump Orders Treasury to Cut All Trade with Spain at NATO Summit, Madrid Calls It Business as Usual

What Trump Said, and to Whom

President Trump did not float a vague warning. He turned to Treasury Secretary Scott Bessent at a press availability in Ankara and gave a direct order: "Cut off all trade with Spain, please, including visits."

"Spain is a wasted cause. We don't want to do any trade business with Spain anymore," Trump said, according to reporting by CNBC, the NY Post, and Newsweek. "Don't even talk to them. They're hopeless, bad people."

He added that he had spoken with Germany, France, the United Kingdom, and Italy during the summit but not Spain. Per El Mundo America's account, Trump described Spain as a country he had no interest in engaging with at all.

NATO Secretary General Mark Rutte, seated next to Trump during the press conference, pushed back gently. "You got Spain to pay 2%. They spent, they made a huge step in last year," Rutte told the president, as CNBC reported. Rutte acknowledged there were still "issues we have to solve" regarding Spain, but his interruption was a notable public defense of a NATO ally that Trump had just called hopeless.

Why Spain Is the Target

Spain is the only NATO member that did not commit last year to spending 5% of its GDP on defense by 2035, according to CNBC. That carve-out was granted at last year's summit, but it came with a warning from Trump that Spain would face a tougher trade relationship.

Spain spent 2.1% of its GDP on defense in 2025, up from 1.4% in 2021, according to data from the Stockholm International Peace Research Institute. That is progress, but it still lags most European allies.

Beyond the spending numbers, Trump also cited Spain's conduct during the U.S. conflict with Iran. According to Live Mint, Spain denied the U.S. access to its military bases for Iran operations and closed its airspace to American aircraft involved in the conflict. That, not just the defense budget, appears to be the sharper grievance.

Madrid's Response: Calm and Unbothered

Spain's Prime Minister Pedro Sánchez attended the group dinner with Trump in Ankara on Tuesday night, the night before Trump publicly called Spain "hopeless" and "bad people." The Spanish government's response to Wednesday's outburst was deliberate understatement.

Sánchez's office told Reuters the remarks were being treated as "business as usual" and that bilateral relations between the U.S. and Spain remained beneficial to both countries in trade and defense. Live Mint reported the office stated Spain has "excellent social, cultural, and economic relations with the United States" and has no intention of changing that.

Spanish outlet Tribuna León, cited by the NY Post, similarly reported that Madrid received Trump's threats "with calm and normality."

That posture reflects a calculated bet: that Trump's public rage will not automatically translate into actual trade restrictions, and that Spain gains nothing by a public fight.

The Strongest Case for Spain

Spain has more than doubled its defense spending as a share of GDP since 2021. It is a founding member of NATO and has contributed to alliance missions over decades. Its refusal to allow U.S. bases to be used for strikes on Iran reflects a sovereign judgment about a conflict Spain did not endorse, a judgment that many European governments quietly share, even if they have not said so as loudly. Prime Minister Sánchez leads a socialist coalition government that would face severe domestic political consequences for capitulating publicly to Trump's demands. The case that Spain is acting in bad faith is harder to make than the case that it is navigating a genuine domestic political constraint.

The airspace and base restrictions during an active U.S. military operation are a different order of friction than missing a spending target. Those decisions go to the question of whether Spain functions as a reliable military partner in a crisis, and that is a legitimate concern for the alliance.

Market Reaction

Spanish financial markets responded. According to CNBC, Spain's benchmark 10-year bond yield rose 7 basis points to 3.5408% after Trump's remarks. Bonds that had already been selling off before the press conference moved further in the wrong direction. The Spanish IBEX 35 equity index fell more than 1%.

Those moves reflect investor unease about a genuine trade disruption, not just rhetoric. Bond yields at 3.54% are not a panic signal; they represent a pricing-in of uncertainty.

What Happens Next

Trump directed Bessent to act "immediately," but the U.S. has no existing legal mechanism to cut off all trade with a NATO ally in a single executive order without congressional implications. The practical question, which no source has yet answered, is what specific policy instrument Bessent would use to carry out the order and on what timeline. That is the gap between Trump's press conference language and actual economic disruption for both countries.