Published by Global Banking & Finance Review®
Posted on March 3, 2026
5 min readLast updated: April 2, 2026
Add as preferred source on GooglePresident Trump on March 3, 2026, threatened to end all trade with Spain after Madrid denied U.S. military access to bases for strikes on Iran, citing Spain’s refusal to meet NATO defense spending demands. Spain responded affirming its sovereignty, adherence to international law, and resilience to p
By Nandita Bose, David Lawder and Victoria Waldersee
WASHINGTON/MADRID, March 3 (Reuters) - U.S. President Donald Trump threatened to impose a full U.S. trade embargo on Spain on Tuesday after the European and NATO ally 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.
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.
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, again expressing his frustration with the Supreme Court's ruling last month that his broadest global tariffs were illegal under a national emergencies law.
NO SEPARATE TREATMENT FOR SPAIN
Merz, speaking with reporters after the meeting, said he told Trump privately that Spain could not be excluded from a trade agreement reached between Brussels and Washington last year.
"I said that Spain is a member of the European Union and we negotiate about tariffs with the United States only together or not at all," he said. "There is no way to treat Spain particularly badly."
Trump publicly asked Bessent and U.S. Trade Representative Jamieson Greer their opinions on cutting off Spanish trade.
"Well, sir, I think we'll talk about it with you," Greer said. "We know you can use it, and if you need to use it to assure national and economic security, we'll do it."
Bessent said the Supreme Court affirmed Trump's embargo powers under the International Emergency Economic Powers Act, adding that the USTR and Commerce Department would begin investigations into how to penalise Spain under other trade laws.
HIGH BAR
Jennifer Hillman, a trade law professor at Georgetown University, said the Supreme Court did not address the president's ability to impose a trade embargo under IEEPA. Trump could do so, but he would have to declare a national emergency over Spain as an "unusual and extraordinary" threat to the United States, she said, adding that such a move would go "well beyond" any previous emergency.
"It's hard to see, however, how Spain denying us the use of air bases on its territory for us to launch an unprovoked attack on Iran poses 'an unusual and extraordinary threat' to our national security or foreign policy," added Peter Shane, a New York University adjunct law professor.
SPAIN RESPONDS
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.
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. U.S. exports of crude oil and liquefied natural gas to Spain have grown in recent years.
Merz said pressure was being brought to bear on Spain from within Europe on defence spending.
"We are trying to convince Spain to catch up with the 3% or 3.5% which we agreed on in NATO," he said, adding later that Spain's defense spending levels had nothing to do with the trade negotiations.
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 by Andrea Shalal and Paolo Laudani; Writing by David Lawder and Aislinn Laing; Editing by David Ljunggren, Alex Richardson, Nia Williams and Cynthia Osterman)
President Trump threatened to cut US trade with Spain after Spain refused to allow US military bases to be used for missions linked to strikes on Iran and did not meet NATO defence spending targets.
The Rota and Moron military bases in southern Spain were affected, with the US relocating 15 aircraft after Spain's refusal.
Spain stated it respects international law, supports its affected sectors, and continues to advocate for free trade and cooperation with the US and EU.
Spain exports olive oil, auto parts, steel, and chemicals to the United States.
The US had a $4.8 billion trade surplus with Spain in 2025, exporting $26.1 billion and importing $21.3 billion in goods.
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