Spain argues NATO funding should address real threats, not arbitrary targets, amidst Trump’s tariff retaliation plans.
The European Commission and Spain’s government have dismissed US President Donald Trump’s latest threat to impose higher tariffs on Madrid over its refusal to meet his proposed NATO target for defence spending.
Trump said on Tuesday that he was “very unhappy” with Spain for being the only NATO member to reject the new spending objective of 5 percent of economic output, adding that he was considering punishing the Mediterranean country.
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“I was thinking of giving them trade punishment through tariffs because of what they did, and I think I may do that,” Trump added. He had previously suggested making Spain “pay twice as much” in trade talks.
Trade policy falls under the remit of Brussels, and the European Commission would “respond appropriately, as we always do, to any measures taken against one or more of our member states”, commission spokesperson Olof Gill said in a press briefing on Wednesday.
The trade deal between the European Union and the United States signed in July was the right platform to address any issues, Gill added.
“The defence spending debate is not about increasing spending for the sake of increasing it, but about responding to real threats,” Spain’s Economy and Trade Ministry said in a statement.
“We’re doing our part to develop the necessary capabilities and contribute to the collective defence of our allies.”
Spain has more than doubled nominal defence spending from 0.98 percent of gross domestic product in 2017 to 2 percent this year, equivalent to about 32.7bn euros ($38bn).
Defence Minister Margarita Robles said allies weren’t discussing the 5 percent target for 2035 in Wednesday’s meeting because they were prioritising the present situation in Ukraine, but wouldn’t completely rule out a shift in Spain’s position.
Targeted tariffs by the US against individual EU member states are rare, but there are precedents, said Ignacio Garcia Bercero, a senior fellow at the Brussels-based economic think tank Bruegel.
In 1999, the US hit the EU with 100 percent punitive tariffs on products such as chocolate, pork, onions and truffles in retaliation for an EU import ban on hormone-treated beef. But those tariffs excluded Britain, which at the time was still a member of the trade bloc.
The US could impose anti-dumping penalties on European products that are mostly produced in Spain, said Juan Carlos Martinez Lazaro, professor at Madrid’s IE business school.
In 2018, Washington imposed a combination of duties of more than 30 percent on Spanish black table olives at the request of Californian olive growers. Spain’s share of the US market plummeted from 49 percent in 2017 to 19 percent in 2024.
Another option would be moving the naval and air bases the US has in southern Spain to Morocco – an idea floated by former Trump official Robert Greenway – which would damage the local economies through the loss of thousands of indirect jobs.
