Trump Threatens Full Trade Embargo on Spain in Retaliation Over Base Access, Defense Spending

By Nandita Bose, David Lawder and Victoria Waldersee

WASHINGTON/MADRID, March 3 (Reuters) – U.S. President Donald Trump on Tuesday threatened to impose a comprehensive trade embargo on Spain, a longstanding European and NATO ally, escalating a dispute over Madrid's refusal to permit U.S. military operations from its soil targeting Iran.

"Spain has been terrible," Trump declared during a meeting with German Chancellor Friedrich Merz. He stated he had instructed Treasury Secretary Scott Bessent to "cut off all dealings" with the country. "We're going to cut off all trade with Spain. We don't want anything to do with Spain," he added.

The threat follows the U.S. relocation of 15 aircraft from the Rota and Morón air bases in southern Spain after the Spanish government, led by Socialist Prime Minister Pedro Sánchez, said it would not authorize their use for strikes on Iran. Trump also reiterated his frustration with Spain's failure to meet NATO defense spending targets, bluntly adding, "Spain has absolutely nothing that we need."

The President asserted his authority to halt all business with Spain, referencing embargo powers and expressing dissatisfaction with a recent Supreme Court ruling that limited his tariff authorities. "All business having to do with Spain, I have the right to stop it... and we may do that with Spain," he said.

European Unity Tested

Chancellor Merz, speaking after the meeting, emphasized European solidarity, telling reporters he had privately informed Trump that Spain could not be singled out from the EU-U.S. trade framework. "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," Merz stated. "There is no way to treat Spain particularly badly."

When Trump publicly queried his advisors, U.S. Trade Representative Jamieson Greer responded cautiously, while Treasury Secretary Bessent cited the International Emergency Economic Powers Act (IEEPA) as a potential legal pathway, noting investigations into penalizing Spain under other trade statutes would begin.

Legal and Diplomatic Hurdles High

Legal experts immediately questioned the feasibility of such an embargo. "The bar is exceptionally high," said Georgetown University trade law professor Jennifer Hillman. She noted Trump would need to declare Spain an "unusual and extraordinary threat" to national security—a move she described as "well beyond" any previous emergency declaration.

Peter Shane, an adjunct law professor at New York University, was more skeptical: "It's hard to see how Spain denying us the use of air bases to launch an unprovoked attack on Iran constitutes such a threat."

Spain's Defiant Response

In a formal statement, the Spanish government urged the U.S. to respect international law and existing EU-U.S. agreements. Madrid asserted it had resources to mitigate the impact of an embargo but would continue advocating for free trade. Spain, the world's top olive oil exporter, also sells auto parts and chemicals to the U.S. but is less economically vulnerable than some European peers due to a consistent U.S. trade surplus with the country, which reached $4.8 billion in 2025.

Analysts note that Sánchez's left-leaning government has repeatedly clashed with Trump, including by blocking weapon shipments to Israel from Spanish ports, setting the stage for the current confrontation.

Voices from the Ground

Reuters spoke to several observers for their reaction:

• Michael Thorne, Political Risk Analyst, London: "This is less about Spain and more about Trump testing the limits of executive power and punishing NATO 'free-riders.' The EU's unified response will be the real test."

• Isabella Rossi, Small Business Owner (Olive Oil Exporter), Seville: "We've survived crises for centuries. This is reckless bullying that hurts families on both sides of the Atlantic. Our products are loved in America; this threat is pure political theater."

• General (Ret.) James Hewitt, Security Consultant, Washington D.C.: "The strategic folly here is breathtaking. You don't torch an alliance over a single policy disagreement. Rota is a vital naval hub. This undermines NATO's southern flank at a time we can least afford it."

• Klara Schmidt, Graduate Student in International Relations, Berlin: "It's terrifyingly impulsive. He's treating a sovereign ally like a failed tenant. This isn't foreign policy; it's a tantrum that could crater markets and force Europe to accelerate its decoupling from the U.S."

(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)