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Trump threatens tariffs on Spain over refusal to boost NATO defense spending

Published by Global Banking & Finance Review

Posted on October 14, 2025

2 min read

· Last updated: January 21, 2026

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Trump threatens tariffs on Spain over refusal to boost NATO defense spending
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By Steve Holland and Nandita Bose WASHINGTON (Reuters) -President Donald Trump on Tuesday threatened trade penalties, including tariffs, against Spain, saying he is unhappy with its refusal to raise

Trump Considers Tariffs on Spain for NATO Defense Spending Dispute

By Steve Holland and Nandita Bose

WASHINGTON (Reuters) -President Donald Trump on Tuesday threatened trade penalties, including tariffs, against Spain, saying he is unhappy with its refusal to raise defense spending to 5% and calling the move disrespectful to NATO.

"I'm very unhappy with Spain. They're the only country that didn't raise their number up to 5%... so I'm not happy with Spain," Trump told reporters at the White House.

"I was thinking of giving them trade punishment through tariffs because of what they did, and I think I may do that," Trump added.

The U.S. president was referring to Spain being the only member of the 32-nation alliance not to commit to increasing military spending to 5% of GDP, as agreed by NATO leaders in June.

Spanish Prime Minister Pedro Sánchez secured a last-minute exemption at the time, saying Spain would only spend up to 2.1%, which he called "sufficient and realistic."

Madrid has argued it compensates for the lower spending with strong troop contributions to NATO missions, including deployments in Latvia, Slovakia, Romania, Bulgaria and Turkey.

(Reporting by Steve Holland and Nandita Bose in Washington; Editing by Lisa Shumaker)

Key Takeaways

  • Trump threatens tariffs on Spain over NATO spending.
  • Spain refuses to increase defense spending to 5% of GDP.
  • Spain argues troop contributions compensate for lower spending.
  • Trump considers trade penalties as a response.
  • Spain secured a last-minute exemption from NATO spending increase.

Frequently Asked Questions

What is NATO?
NATO, or the North Atlantic Treaty Organization, is a military alliance of 30 countries from North America and Europe, established for mutual defense against aggression.
What is trade punishment?
Trade punishment refers to economic sanctions or tariffs imposed by one country on another to influence behavior or retaliate against perceived unfair practices.

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