Spanish PM plays down Trump threat to hike tariffs over defence spend

Donald Trump has brought the topic up three times in just one week. Until a few days ago, he seemed to have forgotten his anger towards Spain - the only Nato country that openly refused, at the summit in The Hague in June, to comply with his demand to raise military spending to 5% of GDP. Now, he's brought it up again - at the White House during a meeting with the President of Finland, at the Gaza Peace Summit in Egypt and with the Argentine President, Javier Milei, once again in Washington.

Still, the Spanish government insists that his warnings are more bark than bite and dismisses the idea that his threat of punishment in the form of tariffs will actually materialise.

After first suggesting last week that Spain should be expelled from Nato for refusing to raise its defence spending, President Trump greeted Prime Minister Pedro Sánchez normally - even with a smile and a few pats on the hand - at the peace summit held in the resort city of Sharm El-Sheikh. There, in the Egyptian city that recently hosted negotiations between Israel and Hamas, about twenty international leaders gathered to support the signing of a ceasefire agreement sponsored by the United States and Egypt, along with Turkey and Qatar.

However, later on, the US president did bring up the controversy, directly asking Sánchez about defence spending.

"Are you working on the GDP thing? We'll get there. But fantastic work you're doing," he said.

The brief remark occurred after Trump greeted each of the international leaders present, during final remarks following the signing of the agreement that ends two years of war in the Gaza Strip.

"Trump is like that - one day he congratulates you, and the next he picks a fight," said sources from the Spanish government.

Spain is part of the 27-state EU customs union, meaning any trade negotiation or retaliation Trump might want to initiate would have to go through the European Commission. The government sees this as a kind of shield.

People close to PM Pedro Sánchez also say that no other European country or Nato ally has, so far, voiced any complaints to Sánchez or responded to Trump's calls to pressure Spain into changing its stance of not exceeding 2.1% of GDP in military spending.

On Monday, in an interview on Cadena SER radio, Sánchez insisted this level of spending already represents a "more than sufficient" contribution to Nato's operational capabilities to face shared challenges.

He also emphasised something the government has repeated often in recent months: that beyond ideological differences, the relationship between the United States and Spain has not suffered since Trump returned to power.