Trump says US will cut all trade with spain over military bases, defence spending

Trump Vows US Trade Embargo on Spain Over Military Bases and Defence Budget

US-Spain Tensions Rise Over Military Bases and Trade

By David Lawder and Victoria Waldersee

Trump's Announcement and Rationale

WASHINGTON/MADRID, March 3 (Reuters) - U.S. President Donald Trump said on Tuesday the United States would cut off all trade with Spain after the European country refused to let the U.S. military use its bases for missions linked to strikes on Iran.

"Spain has been terrible," Trump told reporters during a meeting with German Chancellor Friedrich Merz, adding that he had told Treasury Secretary Scott Bessent to "cut off all dealings" with Spain. 

"We're going to cut off all trade with Spain. We don't want anything to do with Spain," he added.

Military Bases Relocation

The U.S. relocated 15 aircraft, including refuelling tankers, from the Rota and Moron military bases in southern Spain after the country's Socialist leadership said it would not allow them to be used to attack Iran.

Defence Spending Dispute

Trump again referenced Spain's refusal to heed U.S. calls for all NATO members to spend 5% of their GDP on defence, and added: "Spain has absolutely nothing that we need. 

"All business having to do with Spain, I have the right to stop it. Embargoes - do anything I want with it - and we may do that with Spain," he said.  

Planned Trade Actions

Bessent, speaking alongside Trump, said he would instruct the United States Trade Representative and the Department of Commerce to begin investigations into how to penalise Spain. 

Legal Basis for Embargo

Although the Supreme Court last month struck down Trump's ability to use the International Emergency Economic Powers Act to impose broad global tariffs, the president said the decision "totally reaffirmed" his ability to impose a full trade embargo under the law.

IEEPA, passed in 1977, has been heavily used for sanctions to cut Iranian, Russian and North Korean entities out of the U.S. dollar-based financial system and to impose licensing requirements to control or halt exports of sensitive technologies to certain countries.

"The Supreme Court reaffirmed your ability to implement an embargo," Bessent told Trump. 

Spain Responds to US Threats

SPAIN RESPONDS 

Official Government Statement

The Spanish government responded in a statement that the U.S. must be mindful of the autonomy of private businesses, international law and bilateral trade agreements between the U.S. and the European Union. 

Madrid said it had the necessary resources to contain the potential impact of a trade embargo and support affected sectors, but said it would continue to push for free trade and economic cooperation with its partners. 

Economic Impact and Trade Figures

Spain is the world's top exporter of olive oil and also sells auto parts, steel and chemicals to the United States, but is less vulnerable to Trump's threats of economic punishment than other European nations.

The U.S. had a trade surplus with Spain for the fourth year in a row in 2025, at $4.8 billion, according to U.S. Census Bureau Data, with U.S. exports of $26.1 billion and imports of $21.3 billion.

European and NATO Reactions

Germany's Merz said pressure was being brought to bear on Spain from within Europe on defence spending.

NATO Defence Spending Debate

"We are trying to convince Spain to catch up with the 3% or 3.5% which we agreed on in NATO," he said.

"And as the president said, it's correct: Spain is the only one who is not willing to accept that and we are trying to convince them that this is part of our common security that we all have to comply with these numbers." 

Spain's Broader Policy Stance

Spain's Prime Minister Pedro Sanchez, one of a dwindling number of left-leaning voices in Europe, has risked Trump's ire with a series of other policy moves, including refusing to let vessels transporting weapons to Israel dock in Spain. 

(Reporting by Nandita Bose, Andreas Rinke and Victoria Waldersee, additional reporting Paolo Laudani; Writing by Andrea Shalal and Aislinn Laing; Editing by David Ljunggren, Alex Richardson and Nia Williams)