NATO allies pledge $50B in arms as Trump threatens trade with Spain

The 36th NATO summit in Ankara laid bare a widening transatlantic rift, with President Donald Trump demanding unconditional loyalty, threatening to cut trade with Spain, and extracting $50 billion in new arms commitments from allies.

President Donald Trump used the NATO summit in Ankara to extract $50 billion in new arms pledges from allies while publicly threatening to halt all trade with Spain and demanding unconditional support for his Iran campaign, deepening the transatlantic rift.

"There is a strong contrast between what Trump says in public and what he actually says inside," a source present for the closed-door talks told AFP, describing the private session as more measured than Trump's public outbursts.

Trump singled out Turkish President Recep Tayyip Erdoğan for praise — "he rolled out the red carpet" — while calling Spain a "waste of time" and ordering Treasury Secretary Scott Bessent to halt trade with the NATO ally immediately. European and Canadian defense spending has risen 11% in 2026 to $634 billion, with allies pledging €70 billion a year in military support for Ukraine through 2027.

The summit exposed a fundamental question for the world's most powerful military alliance: whether Trump's antagonism is a temporary negotiating tactic or a permanent shift in U.S. foreign policy. European leaders, after holding emergency meetings earlier this year, are increasingly investing in independent defense, space, and AI infrastructure on the assumption it is the latter.

The summit's final communiqué reaffirmed NATO's Article 5 mutual defense clause — "an attack on one is an attack on all" — but the substance of the gathering told a different story. Behind closed doors, Trump reassured allies "we want to remain with you," according to a source inside the session, even as he publicly berated them over Iran and Greenland.

Trump announced the U.S. had attacked Iran again the previous night, declaring the ceasefire over. "They will not be able to possess nuclear weapons," he said. The NATO declaration reiterated that Iran must never have a nuclear weapon and called on Tehran to respect freedom of navigation in the Strait of Hormuz, through which 21% of global oil trade passes.

Erdoğan's Balancing Act

Erdoğan committed to raising Turkey's defense spending to 5% of GDP by 2030, aligning with Trump's new NATO target. Trump responded by announcing he would lift CAATSA sanctions and deliver F-35 fighter jets to Turkey, resolving a years-long dispute over Ankara's purchase of Russian S-400 air defense systems. One option under consideration is relocating the S-400 systems to the United Arab Emirates.

The embrace between Trump and Erdoğan exposed the political Islamist regime's hypocrisy, critics said. The AKP government, which has issued only statements of condemnation over the massacre in Palestine while maintaining trade with Israel, presented Trump's praise as a diplomatic victory in pro-government media.

Europe's Rupture Calculus

Behind the summit's pageantry, European and Canadian leaders are preparing for a potential unraveling of the Western alliance. French President Emmanuel Macron told fellow leaders at an emergency meeting earlier this year: "There is no going back," according to the Wall Street Journal. Canadian Prime Minister Mark Carney, who swept to power on a nationalist backlash to Trump's comments about making Canada the 51st state, has argued the "old America isn't coming back."

Carney commissioned a sensitive review of Canada's dependence on the U.S. for data storage, military hardware, payments processing, and even food. European nations are quietly reducing reliance on American technology, investing in independent satellites to avoid Elon Musk's Starlink system, and developing their own AI and quantum computing platforms.

The last time transatlantic relations faced such strain was during the 2003 Iraq War, when France and Germany opposed the U.S.-led invasion. This time, the rupture runs deeper: it is not about a single conflict but about the structural reliability of the United States as an ally.

Spanish Prime Minister Pedro Sanchez downplayed Trump's trade threat, saying relations were "very positive" and that he held "an informal chat" with Trump about football with "absolutely no kind of tension." But Trump's order to halt trade — the second such threat in months — underscores the unpredictability allies face. It remains unclear what legal authority Trump has to unilaterally end trade with Spain after the U.S. Supreme Court struck down his use of emergency powers to impose arbitrary tariffs.

For investors, the summit's clearest signal was the $50 billion in new defense contracts signed at the accompanying Defense Forum, covering air defense systems, counter-drone solutions, joint production projects, and advanced technology investments. European defense stocks stand to benefit as allies accelerate spending toward the 5% of GDP target, while U.S. defense contractors face uncertainty as Europe explores domestic alternatives.

This article is for informational purposes only and does not constitute investment advice.