EU, Spain reject US tariff threats over NATO spending | Economic and commercial news

Spain argues that NATO funding should respond to real threats, not arbitrary targets, in the context of Trump's tariff retaliation plans.

Published on October 15, 2025October 15, 2025

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The European Commission and the Spanish government have rejected US President Donald Trump's latest threat to impose higher tariffs on Madrid over its refusal to meet NATO's defense spending target.

Trump said Tuesday he was very unhappy that Spain was the only NATO member to reject the new spending target of 5% of economic output, adding that he planned to punish the Mediterranean country.

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“I was thinking about putting trade sanctions on them through tariffs because of what they did, and I think I can do that,” Trump added. He previously suggested making Spain pay twice as much in trade talks.

Trade policy falls within the competence of Brussels and the European Commission will react appropriately, as we always do, to any action taken against one or more of our member states, Commission spokesperson Olof Gill told a press briefing on Wednesday.

The EU-US trade deal signed in July provides the ideal platform to resolve all issues, Gill added.

The debate on defense spending is not about increasing spending for the sole purpose of increasing it, but to respond to real threats, the Spanish Ministry of Economy and Trade said in a statement.

We are doing our part to develop the necessary capabilities and contribute to the collective defense of our allies.

Spain has more than doubled its nominal defense spending, from 0.98% of its gross domestic product in 2017 to 2% this year, the equivalent of around 32.7 billion euros ($38 billion).

Defense Minister Margarita Robles said the allies were not discussing the 5% target for 2035 at their meeting on Wednesday because they were prioritizing the current situation in Ukraine, but would not completely rule out a change in Spain's position.

Targeted tariffs imposed by the United States against certain 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 United States imposed punitive 100% tariffs on the EU on products such as chocolate, pork, onions and truffles, in retaliation for the EU's ban on the import of hormone-treated beef. But these tariffs excluded Britain, which at the time was still a member of the trading bloc.

The United States could impose anti-dumping sanctions on European products that are mainly made in Spain, said Juan Carlos Martinez Lazaro, a professor at IE business school in Madrid.

In 2018, Washington imposed a combination of tariffs of more than 30 percent on Spanish black table olives at the request of California olive growers. Spain's share of the US market has fallen from 49% in 2017 to 19% in 2024.

Another option would be to move U.S. naval and air bases in southern Spain to Morocco, an idea floated by former Trump official Robert Greenway that would hurt local economies through the loss of thousands of indirect jobs.

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