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Date Published: 26/06/2025

Trump's tariff threat over NATO spending is unlikely to hit Spain directly

Experts say EU trade rules protect Spain from unilateral US action

Following the NATO summit in The Hague this week, US President Donald Trump has threatened to double tariffs on Spain in retaliation for Madrid’s refusal to commit to the alliance’s new target of spending 5% of GDP on defence by 2035.

However, trade experts suggest that Trump’s threats are likely to remain symbolic, at least in the short term, due to the structure of European Union trade policy.

Speaking at a post-summit press conference, Trump criticised Spain’s stance, accusing it of being the “only country” not prepared to meet the new defence spending goal and warning that his administration would seek to “make them pay twice as much” through trade penalties.

Yet under EU law, Spain cannot be targeted individually with tariffs, as trade negotiations are conducted collectively through Brussels. Spanish Economy Minister Carlos Cuerpo reiterated this point, stating that “trade matters are handled at EU level,” and not bilaterally between member states and third countries.

Federico Steinberg, a senior analyst at the Elcano Royal Institute, told El País that while Trump may be politically motivated, “it is very difficult, if not impossible, to establish trade penalties of any kind that only affect one country within the EU.”

Nonetheless, specific Spanish sectors, such as olive oil, wine and certain pharmaceuticals, remain vulnerable. Analysts point out that in Trump’s first term, the US imposed tariffs on Spanish olives, leading to a steep decline in exports before alternative markets were found.

Ángel Talavera, chief European economist at Oxford Economics, said any tariffs, should they somehow be imposed, would likely target “symbolic” goods with strong political visibility in Spain. However, he described the overall likelihood of punitive measures as low under current conditions.

Domestically, Trump’s threats could inadvertently benefit Spanish President Pedro Sánchez. With his government facing corruption allegations and pressure from both the right-wing opposition and left-wing coalition partners, a public confrontation with Trump may bolster Sánchez’s image among progressive voters who oppose increased military spending.

At the summit, Sánchez appeared diplomatically distant, avoiding direct engagement with the US President. Despite this, his stance may help consolidate support from parties such as Sumar and Podemos, which have expressed scepticism about NATO and prioritise social spending over defence.

While the transatlantic row has sparked headlines, the real test will come in 2029 when NATO conducts its next spending review. Until then, Spain’s approach is likely to walk a tightrope between domestic political needs and growing pressure from Washington and Brussels.

Image: @sanchezcastejon

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