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Trade halt at NATO
U.S. President Donald Trump ordered an immediate suspension of trade with NATO ally Spain during a NATO summit in Ankara, renewing his criticism of Spain as a “terrible partner” while tensions over defence spending and the Iran war rose.
““I don’t want to do any trade with them, okay?””
At the same summit, Trump told Treasury official Scott Bessent, “I don’t want to do any trade with them, okay?” and Bessent replied, “Yes, sir.”
The directive triggered market stress, with Reuters saying Spanish stocks and bonds came under fire after Trump demanded the United States cut trade ties with Spain.
Reuters also reported that the Spanish IBEX fell 2.6% on the day in afternoon trading, set for its worst one-day fall since Trump’s initial threat in early March.
Legal tools and investor split
A Reuters explainer carried by Devdiscourse said Trump asked Treasury Secretary Scott Bessent to “cut off all trade ... including visits” with Spain amid tensions over defense spending.
The same explainer said trade lawyers pointed to the International Emergency Economic Powers Act (IEEPA) as a possible route, with Peter Shane saying it was “hard to see” how missing a peacetime defense spending target by three percentage points of GDP could qualify as an emergency.
In parallel, StratNews Global reported that Spanish Prime Minister Pedro Sanchez played down the rift and said he had a “very cordial” conversation with Trump during the summit.
Despite the threats, StratNews Global said BlackRock named Spain its “preferred country for equity exposure,” while Reuters reported overall U.S. investment in Spain fell by €1.9 billion in the first quarter.
What’s at stake next
El Mundo America tied the pressure on Spain to NATO spending, saying defense spending rose from 12.828 billion in 2020 to 35.670 billion last year, and it cited Reuters for the dispatch “Spanish markets, hit by Trump's renewed threat.”
““Spanish markets, hit by Trump's renewed threat.”
El Mundo America also reported that U.S. imports of Spanish products have fallen by 14% while sales to Spain have remained at similar levels, producing a 54% improvement in the U.S. trade balance in the first five months of 2026 compared to the same period last year.
On investment, El Mundo America said net investment from the U.S. in Spain plummeted by 719.48% in the first quarter of 2026, attributing it to disinvestments of 3.335 billion in one quarter.
The same El Mundo America account framed the counterweight as BlackRock’s view that “Spain remains our preferred country for equity exposure,” while Global Banking & Finance Review reported that Spanish 10-year bond yields rose, with the benchmark 10-year Bono up 9 basis points on the day at 3.565%.
