Spain’s Prime Minister Pedro Sánchez is standing firm on his decision to opt out of a significant increase in NATO defense spending, a stance that has drawn sharp criticism and tariff threats from U.S. President Donald Trump. The move comes at a complex time for Sánchez, facing domestic political pressures and sparking concerns among Spanish businesses about potential economic fallout.
At the recent NATO summit in The Hague, member nations agreed to substantially boost their defense and security contributions, aiming for a new target potentially reaching 5% of GDP. This ambitious goal, intended to strengthen the alliance amid shifting global security dynamics and driven partly by European concerns over Russia and persistent U.S. calls for greater burden-sharing, was structured to include core defense spending (like troops and equipment) alongside broader security measures (such as cyber resilience).
However, Prime Minister Sánchez secured a last-minute exemption for Spain. Instead of committing to the 5% goal, Spain will limit its defense expenditure increase to a more modest 2.1% of GDP, a level Sánchez described as “sufficient and realistic.” This decision follows a period where Spain was noted as NATO’s lowest spender, allocating only around 1.28% of its GDP to defense in the previous year. Sánchez had previously targeted reaching 2% this year, a goal that had already faced pushback from some of his left-wing political allies at home.
Trump’s Criticism and Trade Warnings
The exemption immediately drew a forceful response from U.S. President Donald Trump. He accused Spain of seeking “a little bit of a free ride” within the alliance and warned that the country would “have to pay it back to us on trade” through higher tariffs. This public rebuke highlights Trump’s consistent pressure on allies to increase their defense contributions, often linking security cooperation to trade terms.
Sánchez Pushes Back, Citing EU Trade Authority
Responding to Trump’s comments, Prime Minister Sánchez reiterated Spain’s position, emphasizing that trade policy for the European Union, including member states like Spain, is managed centrally by the European Commission in Brussels, not by individual governments. “What is clear is that trade policy is a policy directed from here, from Brussels,” Sánchez stated. He also affirmed Spain’s positive relationship with the United States, calling it “a friend of Spain.”
The exact nature and implementation of Trump’s threatened tariffs remain uncertain, leading to speculation among international observers. Belgian Prime Minister Bart De Wever noted the difficulty in interpreting Trump’s remarks and found it “a mystery” how he might impose tariffs specifically on Spain, questioning if it would target particular products.
Domestic Challenges and Business Concerns
Sánchez’s decision on the international stage is seen by some analysts as potentially intertwined with complex domestic pressures. His Socialist party is currently grappling with corruption cases, which have led to increased calls for early elections, even from within his own left-wing coalition. Political analyst Montserrat Nebrera suggested that Sánchez’s resistance to the higher 5% NATO target might be partly aimed at appealing to his domestic partners who are critical of increased defense spending, describing his response to Trump’s approach as “something similar” to “theatre.”
Within Spain, the decision has also met criticism from the business community. Antonio Garamendi, president of the Spanish Confederation of Business Organizations, called the spending opt-out an “error,” arguing that not aligning with European allies increases the risk of “punishment.” Garamendi expressed significant concern that while the EU handles overall trade negotiations, Spain could still be vulnerable to targeted tariffs impacting specific industries. He specifically highlighted the steel, automotive, and olive oil sectors as potentially exposed industries that should be a major concern for the government.
As the standoff continues, Spain’s commitment to a lower defense spending target amidst broader allied increases presents both international diplomatic challenges with key partners like the U.S. and potential economic risks for critical national industries, all while navigating a turbulent domestic political landscape.
