President Donald Trump sharply criticized Spain during a NATO summit in Ankara, Turkey, accusing the country of failing to contribute adequately to the alliance and calling for the United States to 'cut off all trade with Spain, please, including visits' [1]. Trump described Spain as 'a terrible partner in NATO' and claimed, 'They don't participate. They don't pay. I don't want anything to do with Spain,' further labeling Spanish officials as 'hopeless, bad people' [1].
This confrontation centers on Spain's defense spending, with Trump highlighting that Spain is the only NATO member not to have committed in the previous year to spending 5% of its GDP on defense by 2035 [1]. According to the Stockholm International Peace Research Institute, Spain spent 2.1% of its GDP on defense in 2025, an increase from 1.4% in 2021, but still behind most European countries [1]. NATO Secretary General Mark Rutte, present at the press conference, acknowledged Spain's progress, stating, 'You got Spain to pay 2%. They spent, they made a huge step in last year,' but also noted that 'issues we have to solve' remain regarding Spain's contributions [1].
Financial markets reacted negatively to Trump's remarks. Spanish bonds, which had already been under pressure prior to the press conference, saw further declines, with the yield on Spain's benchmark 10-year bond rising by 7 basis points to 3.5408% [1]. The Spanish IBEX 35 equity index also fell, trading more than 1% lower following the news [1].
CNBC reported that it has reached out to the Spanish government for comment, but no official response was available at the time of publication [1].
CONCLUSION
President Trump's call to cut off trade with Spain over NATO spending triggered a sharp selloff in Spanish bonds and equities. The market response underscores investor concerns about potential diplomatic and economic fallout from escalating tensions between the U.S. and Spain.