US President Donald Trump's administration is taking concrete steps to impose economic sanctions on Spain.
The US Treasury Department, in close cooperation with the Commerce Department and the Office of the US Trade Representative (USTR), is working to prepare a detailed list of Spanish goods that could be covered by a trade embargo.
A US official confirmed to Reuters that the so-called “menu“ of Spanish products will be presented to the head of state within a few days, an indication that the possible ban could be partial.
The reasons for the escalation: Defense spending and Iran
The White House's decision comes immediately after Donald Trump's harsh statements during the NATO summit in Ankara. The American leader openly criticized Madrid, calling Spain a “terrible partner“ and “a hopeless case“. He publicly ordered Finance Minister Scott Besant to suspend all trade relations with the European country, including tourist exchanges.
The main points of tension between Washington and the government of Prime Minister Pedro Sanchez are two:
- NATO's Defense Budget: The US is pushing European allies to increase their military spending to 5% of their Gross Domestic Product (GDP). Spain currently spends around 2% of its GDP on defense (around €35.41 billion) and refuses to commit to a higher threshold.
- Military bases and the conflict with Iran: Relations deteriorated dramatically in March when Madrid refused to allow US forces to use the joint military bases “Rota“ and “Moron“ on Spanish territory for air strikes against Iran, arguing that the operations went beyond the framework of the agreements and the UN Charter.
Which sectors are at risk?
While a full economic embargo requires the activation of the International Emergency Economic Powers Act (IEEPA) by declaring a national emergency, the more likely scenario is the imposition of targeted tariffs and quotas. Among the most exposed Spanish goods, which are traditionally imported into the US, are:
- Agricultural Products and Food: Spain is the world's largest exporter of olive oil, and also exports significant quantities of wine and olives (which were already the subject of trade disputes during Trump's first term).
- Industry and Pharmaceuticals: The list could affect exports of auto parts, steel, chemicals, as well as pharmaceuticals and medical supplies.
Reactions in Madrid and Brussels
Spanish Prime Minister Pedro Sanchez demonstrated diplomatic calm to the media, describing relations with the United States as “very positive in social, cultural and economic terms“. At the Ankara meeting, he held an informal conversation with Trump, downplaying the threats and emphasizing that Spain remains a reliable ally whose troops actively participate in NATO missions abroad.
However, legal experts and representatives of the European Commission warn that a unilateral embargo against Spain would face serious legal and practical obstacles. Since the European Union operates as a single market and trade policy is agreed collectively by Brussels, any sanction against an individual member state is considered an attack on the entire bloc. Such a move by Washington risks unleashing a full-scale trade war between the United States and the EU worth nearly $1 trillion.
Despite the threats, financial markets reacted nervously – The Spanish stock index IBEX 35 fell 2.7%, and shares of banking giants such as Banco Santander and BBVA saw significant declines.
Sources: Reuters, Bloomberg, Politico, El País