Trump Targets Spain Over NATO Spending

Donald Trump arrived at the NATO summit in Ankara with a familiar complaint and left it attached to a new threat. Spain, he said, was a "terrible partner". Then he told Treasury Secretary Scott Bessent to cut trade with Madrid (CNBC).

That matters because it joins two systems allies have long tried to keep separate. NATO spending rows are meant to be fought inside the alliance. Trade punishment belongs somewhere else entirely. Spain also cannot control the trade lever Trump threatened to pull. As an EU member, it has handed that power to Brussels. A dispute over defence budgets has become a test of whether the EU will protect one of its own from pressure applied by Europe’s main security guarantor.

A Political Pledge Without Legal Teeth

NATO spending targets sound like hard law. They are not. The North Atlantic Treaty requires allies to maintain defence capacity, but it does not set a percentage of GDP. The 2% benchmark came from the 2014 Wales Summit as a planning target, not a treaty obligation.

The new 5% figure, divided roughly between 3.5% for core defence and 1.5% for resilience, came out of summit pressure. Secretary General Mark Rutte has been demanding "credible national plans" (The Guardian).

Spain’s argument is that it can deliver the capabilities NATO has asked of it while spending about 2.1% of GDP (Tagesschau). Trump’s argument is that this is free-riding. The awkward truth is that neither side can prove the case cleanly, because NATO does not publish a transparent checklist showing what each ally provides against what it owes.

Only the EU Can Set Trade Policy

This is where the row moves from NATO politics into EU law. Under the treaties, common commercial policy is an exclusive EU competence, meaning it belongs to the Union rather than to national governments (EUR-Lex, Art. 3 TFEU).

Spain cannot cut its own bilateral trade deal with Washington. Washington, in turn, cannot punish Spain alone without running into the EU customs union, the single external trade border used by all 27 member states. After Trump’s instruction to halt commerce, trade continued normally.

For Ireland, a non-NATO country but deeply exposed to EU-US trade, that distinction is not academic. The same EU trade architecture that protects Spain from being singled out is the one Ireland relies on every day, from pharma exports to digital services. If Washington tries to turn a NATO budget dispute into a trade weapon, Brussels becomes the point of defence.

Eastern allies are reading the threat through their own geography. Poland, which expects to spend 4.68% of GDP on defence in 2026, treated Trump’s frustration as understandable while describing the summit as an alliance crisis. Lithuania’s President Nausėda backed pressure for higher spending, but insisted that Article 5, NATO’s mutual-defence promise, must remain unconditional.

For Warsaw and Vilnius, the spending problem is real. So is the danger of making American protection feel conditional.

Denmark’s Prime Minister Frederiksen tied the Spanish row to Trump’s renewed pressure over Greenland, saying Denmark would defend its territory. Two cases, one method: comply, or face consequences outside the defence file.

Europe’s Untested Shield

The EU has already built a legal tool for this sort of pressure. Regulation 2023/2675, the Anti-Coercion Instrument, allows the European Commission, the EU’s executive arm, to investigate when a non-EU country uses trade threats to force a member state into a policy choice.

If coercion is found, the Commission proposes countermeasures. The Council, where national governments vote, must then approve them. France and the Commission have both said Brussels would defend Spain (Le Figaro).

The instrument has never been activated. Not against China. Not against anyone. Using it against Europe’s largest security partner would be a much harder political step than writing it into law.

Trump’s threat may not become durable policy. But it has already changed the conversation in European capitals. The question is no longer only how much allies should spend. It is what it costs to defy Washington.

Europe’s defence shortfall is real, and eastern member states are right to argue that capability matters more than summit language. Trump has also given Europe’s autonomy camp a useful argument. If the country that underwrites European security can threaten trade over a budget dispute, dependence on that country becomes harder to defend. Ursula von der Leyen and the governments that created the anti-coercion shield are now facing the case it was designed for.