BRUSSELS — The uncertainty surrounding Donald Trump’s stance on international relations has left Spain’s business sector on high alert. As Prime Minister Pedro Sánchez’s government stands firm against the U.S. and Israel’s military actions in Iran, Spanish companies and regional leaders are increasingly concerned about the implications of potential U.S. retaliation.
Rising tensions between Madrid and Washington
Following Sánchez’s refusal to permit U.S. military planes to utilize Spanish airbases for operations in Iran, tensions have escalated, prompting fears of a severe breakdown in trade relations. President Trump and Treasury Secretary Scott Bessent recently expressed intentions to sever trade ties with Spain, the fourth-largest economy in the European Union.
Despite the challenges for the U.S. to inflict economic damage on Spain, given the EU’s structure as a seamless common market comprising 27 nations, the threat of a trade embargo looms large for Spanish businesses. The U.S. remains a crucial source of energy for Spain, providing over 15 percent of its oil imports last year and a staggering 44 percent of its liquefied natural gas imports in January alone. Disruptions to this supply could prove catastrophic amidst rising energy prices driven by ongoing geopolitical conflicts.
Responses from Spanish industry leaders
While the U.S. accounts for a modest fraction of Spain’s overall exports, the ramifications of a trade suspension would be particularly pronounced in certain regions, such as the Basque Country, which heavily relies on exports to the U.S. “Around 8 percent of our exports go directly to the States,” noted Ander Caballero, head of foreign affairs for the Basque government. He emphasized the need for vigilance, especially regarding sectors like energy, automotive, and manufacturing, which are crucial to the region’s economy.
“The Basque Country cannot control the global geopolitical landscape, but we can react quickly to protect our industry,” said Basque Country President Imanol Pradales.
In response to the escalating situation, Pradales convened an emergency meeting of the region’s “Industrial Defense Group,” which comprises government officials and business leaders. This task force was initially established to navigate the effects of Trump’s tariff policies and has met four times in recent weeks to strategize on potential trade disturbances stemming from the conflict in the Middle East.
As the specter of economic sanctions looms, concerns have also been raised about major financial institutions such as Banco Santander, which recently announced its acquisition of Webster Financial Corporation in the U.S. The deal, valued at $12.2 billion, could propel Santander into the ranks of top American lenders, but a breakdown in relations with Washington could jeopardize necessary regulatory approvals.
Despite the rising tensions, Santander Executive Chairman Ana Botín sought to reassure investors, emphasizing the importance of maintaining a long-term perspective. “Trade continues and is very strong,” she stated, reflecting on the historical ties between Spain and the U.S.
However, the uncertainty remains, as some industry analysts speculate that Trump may not follow through on his threats. Historical precedents suggest that when the risk of economic fallout becomes too great, Trump has a tendency to back down from his more aggressive stances.
As Spain grapples with the implications of the ongoing conflict and potential trade disruptions, experts warn that the broader economic fallout could have substantial consequences. José Manuel Corrales, a professor of economics and international relations, remarked, “This latest war is already going to have consequences for the American economy, but the Trump administration is also going to have to pay for the damage it’s wrought on the global economy sooner or later.”