What Happened?

US President Donald Trump has threatened to impose higher tariffs on Spain due to its refusal to meet his proposed NATO target for defence spending, which is 5% of economic output. Trump expressed his dissatisfaction with Spain,stating it is the only NATO member rejecting the new objective.

This follows a NATO commitment in June 2025 to increase defence spending, largely driven by trump’s demands.

Spain’s Position

Spain’s government and the European Commission have dismissed Trump’s threat. Spain argues that NATO funding should address genuine security threats rather than adhering to arbitrary targets. They believe the focus should be on effective defence strategies, not simply increasing spending to a specific percentage.

Spain has consistently maintained that its defence spending is appropriate for its security needs and contributions to NATO operations.

The 5% Target and its Context

The push for a 5% defence spending target represents a significant increase from the previously agreed-upon 2% guideline. Trump has long criticized NATO allies for not contributing enough to their own defence, arguing that the US bears an unfair burden.

The 5% target is seen by some as a political pressure tactic aimed at forcing allies to increase their military capabilities and reduce their reliance on the US. However, it has also been met with resistance from countries like Spain, who question its feasibility and strategic value.

Timeline of Events

Who is Affected?

• Spain: Faces potential tariffs on its exports to the US.
• NATO: The dispute highlights internal tensions within the alliance.
• The US: Risks damaging relationships with key allies.
• Global Economy: Potential tariffs coudl disrupt trade and economic stability.