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Trump’s Trade Threat
U.S. President Donald Trump renewed his threat to cut off trade with Spain during a NATO summit in Turkey, saying, “Spain is a wasted cause” and “We don’t want to do any trade business with Spain anymore, by the way.”
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The MS NOW report says Trump tied the latest push to disputes over Spain’s stance on Iran and the U.S. military’s use of Spanish air bases, and it adds that he ordered Treasury Secretary Scott Bessent to cut off all trade for the second time this year.
Axios reported that Trump’s threat to “cut off all trade” with Spain was “immediately a market event — at least in Europe,” with Spain’s benchmark stock index falling 2.7% Wednesday.
Axios also said the premium investors demand to hold Spanish government debt relative to Germany’s climbed to its highest level this month, and it framed the legal and implementation path as unclear.
In response, Spain’s Prime Minister Pedro Sánchez’s office said Madrid “maintains an excellent social, cultural, and economic relationship with the US, and we have no intention of seeing that change.”
Madrid Says No Tension
Spain played down the threat, with the South China Morning Post saying Sánchez told reporters there was “absolutely no tension of any kind” after he had an “informal chat” with Trump.
Euronews likewise reported Sánchez said the ties were “very positive” despite Trump’s threat, and it quoted him saying, “there was absolutely no kind of tension.”
The Straits Times reported that Madrid said Trump softened his rhetoric hours after threatening to halt trade, after he learned of Spain’s contributions to NATO.
At the NATO summit in Ankara, the Straits Times said Trump called Spain a “terrible partner” and ordered an immediate halt to all trade with the country, then later told reporters aboard Air Force One, “Spain was very generous today.”
The Straits Times also said a U.S. official told Reuters that federal agencies would present Trump with a “menu” of Spanish products that may be embargoed, and it noted trade lawyers said Trump could invoke the International Emergency Economic Powers Act.
What’s at Stake
MS NOW said ending all trade with Spain would limit Americans’ access to common household goods such as olive oil and interfere with existing agreements with the European Union.
It reported that the US and Spain trade roughly $47 billion annually in goods, and it added that annual U.S. imports of Spanish virgin olive oil represent close to 90 million kilograms of product, exceeding $860 million worth of product.
MS NOW also said the USDA reported that the US produces less than 2% of the olive oil the country consumes, forcing the US to import from other countries such as Italy, Greece, Portugal, Tunisia or Turkey.
Euronews reported that any bid to impose trade restrictions on Spain would be complicated because Spain is a member of the European Union, which allows goods to move freely between its 27 countries.
Meanwhile, Axios said any attempt to embargo a single member state would seemingly blow up the trade deal between the U.S. and the European Union, and it warned that disruption to Spanish imports would layer on more inflationary risk for items including pharmaceuticals to olive oil.
