U.S. President Donald Trump has threatened to stop all trade with Spain after the country refused to allow American forces to use its military bases for missions linked to strikes on Iran. The warning came during a meeting with German Chancellor Friedrich Merz.

Speaking to reporters, Trump strongly criticised Spain’s actions. “Spain has been terrible,” he said, adding that he had instructed Treasury Secretary Scott Bessent to “cut off all dealings” with Spain. Trump further said, “We're going to cut off all trade with Spain. We don't want anything to do with Spain.”

The dispute began after Spain’s Socialist-led government refused to allow U.S. military aircraft to use the Rota and Moron bases in southern Spain for operations connected to strikes on Iran. Following Spain’s decision, the United States relocated 15 aircraft, including refuelling tankers, from the two bases.

Trump also raised the issue of defence spending. He said Spain had not responded to U.S. calls for all NATO members to spend 5% of their GDP on defence. “Spain has absolutely nothing that we need,” Trump said. He added, “All business having to do with Spain, I have the right to stop it. Embargoes - do anything I want with it - and we may do that with Spain.”

During his remarks, Trump again expressed frustration with the Supreme Court’s ruling last month that his broadest global tariffs were illegal under a national emergencies law.

Chancellor Merz later told reporters that he had made it clear to Trump that Spain could not be singled out in trade matters. “I said that Spain is a member of the European Union and we negotiate about tariffs with the United States only together or not at all,” Merz said. “There is no way to treat Spain particularly badly.”

Trump also publicly asked Bessent and U.S. Trade Representative Jamieson Greer for their views on cutting off Spanish trade. Greer responded, “Well, sir, I think we'll talk about it with you. We know you can use it, and if you need to use it to assure national and economic security, we'll do it.”

Bessent said that the Supreme Court had affirmed Trump’s embargo powers under the International Emergency Economic Powers Act (IEEPA). He added that the USTR and the Commerce Department would begin investigations into how Spain could be penalised under other trade laws.

However, legal experts questioned whether such action would stand. Jennifer Hillman, a trade law professor at Georgetown University, said the Supreme Court did not address the president’s ability to impose a trade embargo under IEEPA. She said Trump could take such a step, but he would need to declare a national emergency over Spain as an “unusual and extraordinary” threat to the United States. She added that such a move would go “well beyond” any previous emergency.

Peter Shane, an adjunct law professor at New York University, also raised doubts. He said, “It's hard to see, however, how Spain denying us the use of air bases on its territory for us to launch an unprovoked attack on Iran poses ‘an unusual and extraordinary threat’ to our national security or foreign policy.”

Spain responded in a formal statement, saying the United States must respect the autonomy of private businesses, international law, and bilateral trade agreements between the U.S. and the European Union. The Spanish government said it had the necessary resources to handle the possible impact of a trade embargo and to support affected sectors. At the same time, it said it would continue to promote free trade and economic cooperation with its partners.

Spain is the world’s top exporter of olive oil and also sells auto parts, steel, and chemicals to the United States. However, it is considered less vulnerable to economic pressure from Washington compared to other European countries.

According to U.S. Census Bureau data, the United States recorded a trade surplus with Spain for the fourth year in a row in 2025. The surplus stood at $4.8 billion, with U.S. exports reaching $26.1 billion and imports at $21.3 billion. In recent years, U.S. exports of crude oil and liquefied natural gas to Spain have grown.

Merz also said that other European countries were putting pressure on Spain to increase its defence spending. “We are trying to convince Spain to catch up with the 3% or 3.5% which we agreed on in NATO,” he said. However, he clarified that Spain’s defence spending levels were not linked to the trade negotiations.

Spain’s Prime Minister Pedro Sanchez, who is among the few remaining left-leaning leaders in Europe, has previously made decisions that have angered Trump. These include refusing to allow ships carrying weapons to Israel to dock in Spanish ports.