President Donald Trump threatened to cut off trade relations with Spain after the country refused a U.S. request to use its military bases for operations against Iran.
"We will stop all trade with Spain," Trump said during a bilateral meeting with German Chancellor Friedrich Merz at the White House in Washington on Saturday, according to Bloomberg.
Spanish Prime Minister Pedro Sánchez immediately rejected the U.S. request to use the Rota Naval Base in Cádiz and Morón Air Base in Seville for the Iran strikes. The bases have served as symbols of Spain's Atlantic alliance ties.
Spanish Defense Minister Margarita Robles drew a clear line on Friday, stating that "the agreement signed with the United States for the use of the bases only permits operations within the framework of international law."
The dispute is expected to strain bilateral relations, potentially extending into economic affairs. Foreign media outlets reported that Banco Santander's pending acquisition of U.S. financial firm Western Financial Corporation could be affected.
"There is a possibility that the acquisition negotiations could be delayed as President Trump has decided to halt trade with Spain," said Mike Mayo, an analyst at Wells Fargo.