President Donald Trump has threatened to halt trade with Spain after the Spanish government refused to allow U.S. forces to use its military bases for operations linked to the current conflict with Iran.

Speaking to reporters at the White House on Tuesday, Trump criticised the NATO ally and suggested the United States could suspend economic ties in response.

“We don’t want anything to do with Spain,” Trump said, describing the country as “terrible.” He added that the U.S. could move to halt trade between the two countries, which totals roughly $50 billion annually.

“I could tomorrow, or today, even better—stop everything having to do with Spain, all business having to do with Spain,” he said.

The comments came after Madrid declined a U.S. request to use Spanish bases as part of military operations connected to the escalating crisis with Iran.

Spain Rejects Role in Military Operations

Spain’s government has taken a cautious position on the conflict. Prime Minister Pedro Sánchez has criticised the recent strikes on Iran, describing them as a dangerous escalation and urging restraint.

Madrid subsequently made clear that Spanish territory would not be used to support military action tied to the operation.

The decision places Spain at odds with Washington at a moment of heightened tensions in the Middle East and has opened a diplomatic rift between the allies.

Trade Threat Raises Questions About EU Rules

Trump’s suggestion that the United States could cut off trade with Spain also raises practical questions. Spain is a member of the European Union, meaning trade policy is largely governed by EU-wide agreements rather than bilateral arrangements with individual member states.

Any attempt to target Spain specifically could therefore complicate broader trade relations between the United States and the EU.

Officials in Madrid responded cautiously to the remarks. Spanish representatives said that any review of the trade relationship should respect existing international agreements and the broader framework governing EU-U.S. commerce.

NATO Spending Debate Adds Context to the Dispute

The dispute also reflects a wider debate within NATO over defence spending targets.

At the 2025 NATO summit in The Hague, alliance members endorsed a political commitment to move defence spending toward 5 percent of GDP in the coming decade. However, NATO spending targets are not legally binding obligations. They function as political guidelines agreed by member states rather than enforceable treaty requirements.

Spain was among the governments that raised concerns about the target. Prime Minister Pedro Sánchez argued that committing to the higher spending level would not necessarily improve security and warned it could deepen Europe’s reliance on external defence suppliers.

“Committing to 5 percent would not make us safer,” Sánchez said, arguing that such spending could reinforce dependence on foreign defence industries rather than strengthen Europe’s own capabilities.

The debate reflects a growing concern among some European policymakers and analysts. In recent years, a significant share of increased European defence spending has gone to U.S.-based defence contractors, raising questions about whether rising budgets are strengthening Europe’s own defence industry or reinforcing transatlantic dependence. Analysts in Washington acknowledge that in a major war U.S. defence production would prioritise American forces over European customers.

Supporters of the higher spending targets argue the opposite. They say NATO members must increase defence budgets to deter threats and maintain collective security as geopolitical tensions grow.

Spain’s position, therefore, shows a deeper strategic debate within the alliance about how Europe should balance military investment, alliance commitments and defence autonomy.

A Growing Transatlantic Dispute

The episode highlights the strain the Iran conflict is placing on relations between Washington and some European partners. While several NATO members have expressed concern about escalation, governments remain divided over how closely to align with the U.S. approach.

For Spain, the refusal reflects both domestic political pressure and longstanding sensitivities about the use of national territory in foreign military operations.

Whether Trump follows through on his threat to restrict trade remains unclear. But the comments signal a sharp escalation in rhetoric between Washington and one of its European allies at a time when transatlantic unity is already under pressure.

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