Lorraine Williamson
As Brussels races to finalise a long-awaited trade agreement with the United States, a political flare-up with Spain is threatening to derail the entire process.
US President Donald Trump has launched a scathing attack on Madrid over its defence spending, suggesting Spain should face economic penalties — potentially in the form of double taxation — unless it increases military contributions.
The comments, made just days after a NATO summit aimed at reinforcing allied cooperation, have caused consternation across European capitals. Leaders now fear that Trump’s hardline stance could fracture EU unity and undermine efforts to secure a trade pact by the looming 9 July deadline.
Diplomatic storm at a critical moment
At the heart of the dispute is Spain’s refusal to boost defence spending to match Trump’s expectations. Prime Minister Pedro Sánchez has stood firm, insisting that “defence and trade are two completely different matters” and rejecting the idea that military budgets should influence commercial negotiations.
But not everyone is convinced that the two can be kept separate. EU insiders are increasingly alarmed that Spain’s position could become a liability, weakening Europe’s collective hand just as the final stages of negotiations unfold. France and Germany — both keen to reach an agreement — are now questioning whether Spain may be the weakest link in the EU’s stance.
Macron: “Allies should not undermine each other”
French President Emmanuel Macron didn’t mince words, warning that Trump’s tactic “weakens our position as allies” and denouncing any trade war between NATO members as “a mistake”. His remarks were echoed by Denmark’s Prime Minister Mette Frederiksen, who highlighted the contradiction of economic threats following a summit that stressed unity in the face of shared global threats.
“This is no time to be undermining one another’s economies,” she said, calling for the EU to present a “clear and united response” if Washington chooses confrontation over compromise.
The EU holds the line — for now
Most EU leaders continue to back the European Commission’s lead in negotiations, hoping to shield the talks from political turbulence. But unity isn’t total. Hungary’s Viktor Orbán has once again broken ranks, positioning himself as a potential spoiler by signalling his support for a more conciliatory line with Washington.
Behind closed doors, however, discussions are growing tense. The Commission received a revised proposal from the US earlier this week, but it’s unclear whether it will be enough to avert the threat of punitive tariffs — which could hit European industries like steel and automotive manufacturing with duties of up to 50%.
Clock ticking on EU response
As the 9 July deadline approaches, pressure is mounting on Brussels to deliver clarity. While countries like Denmark remain open to extending the timeline, others — notably Germany — are pushing for urgency, citing vulnerable sectors in need of protection from looming trade shocks.
Trump’s direct targeting of Spain is now seen as more than a personal vendetta. It may well be a calculated move to divide the EU and extract concessions. Whether Europe holds the line or fractures under pressure will likely determine the future of its economic relationship with Washington — and perhaps the shape of global trade diplomacy in the years to come.
Will Europe hold its nerve?
Spain’s standoff with Trump is no longer just a bilateral dispute — it’s a test of EU cohesion at a time of rising geopolitical pressure. With just days to go, Brussels must walk a tightrope between defending its values and avoiding a damaging rupture with its largest trading partner. The answer may well shape the bloc’s role in a shifting global order.
Source: El Pais