TREMORS rippled through Spain on Tuesday when US President Donald Trump threatened to cut off all trade over Pedro Sanchez’s refusal to let US forces use bases in Andalucia to bomb Iran.
But while Andalucia’s olive oil producers may be trembling in fear, the US actually runs a trade surplus with Spain – so who really stands to lose out in a trade war?
Make no mistake: Trump’s threat carries weight.
The US is one of Spain’s most important non-European trading partners, and Spanish exporters have long relied on access to the American market. But the structure of the relationship complicates Trump’s calculus.
In fact, the balance of trade currently favours Washington rather than Madrid. According to the US Census Bureau, the US recorded a $4.8?billion trade surplus with Spain in 2025, exporting roughly $26.1?billion in goods while importing about $21.3?billion in return.
That surplus marked the fourth consecutive year the United States sold more to Spain than it bought – and a trade suspension stands to sting American companies at least as hard as their Spanish counterparts.
While the total value of Spain’s exports to the US is significant, it represents only 4.6% of the country’s overall outgoing economy, leaving it relatively insulated from a wholesale cut-off.
Most of those exports fall into two main categories: agri-food products, including olive oil, wine, and cured meats, and industrial goods such as machinery, chemicals, and pharmaceuticals.
The impact of a trade embargo would certainly not be felt evenly across Spain, with Catalonia, the Valencian Community, and Andalucia seeing the largest losses.
In 2025, Catalonia exported around €4.2?billion in machinery, chemicals, and pharmaceuticals to the US – meaning industrial regions there could face real disruption.
The Valencian Community, with exports of roughly €2.57?billion (mostly electrical equipment and ceramics), would also feel the pinch.
And for Andalucia, the blow would hit the agri-food sector hard: olive oil exports alone are valued at nearly €970?million, and the US market absorbs about half of non-EU olive oil exports – with Andalucia the largest producer in the world.
But overall, according to the Bank of Spain, most of Spain’s exports head to the EU, with France and Italy taking the lion’s share. Spain as a whole would survive a trade embargo, even if reeling from it.
US manufacturers, on the other hand, stand to feel a sharp sting.
In 2025, the US sold roughly $8.25?billion in crude oil and liquefied natural gas (LNG) to Spain. Industrial machinery added around $1.11?billion, and electrical equipment another $820?million.
Disrupting these flows would directly hit American energy exporters and machinery manufacturers, many concentrated in the Midwest and industrial Northeast – making a trade embargo costly for US firms and workers alike.
Pharmaceuticals and medical supplies, which accounted for about $5.15?billion, represent another high-stakes category. Other key exports – including plastics, organic chemicals, fruits and nuts, and vehicles or aircraft components – reinforce the point: a large portion of US exports to Spain supports critical supply chains and high-value industries that could not be easily redirected elsewhere.
And a rupture between Washington and Madrid could also hit another surprising spot: American investors in Spain’s property market, particularly along the Costa del Sol.
US nationals are among the fastest-growing foreign buyers in the country, purchasing nearly 2,800 homes in 2024 and paying the highest average prices of any nationality.
Many of these purchases are concentrated in southern Spain’s luxury markets around Marbella, where international buyers already account for roughly a third of transactions.
While a trade embargo would not automatically block real-estate investment, broader economic fallout could quickly ripple back to US investors.
For Americans who have relied on the Costa del Sol as a stable outlet for capital, even a modest slowdown in transactions could translate into lost opportunities.
There is one area, however, where the pain would cut both ways. In 2025, Spain imported about 45% of its natural gas from the US – more than double the volume from 2024, according to Spain’s oil watchdog CORES.
In 2016, the figure stood at 1%.
With virtually no domestic production, Spain relies almost entirely on imports for its energy needs. US LNG has displaced much of the pipeline gas once supplied by Russia and Algeria, reshaping Spain’s energy mix and underlining how critical American cargoes have become.
An abrupt cutoff of US natural gas would have immediate economic and operational consequences. Higher energy costs would ripple through manufacturing and household bills, energy-intensive industries could see margins squeezed, and uncertainty over alternative supplies would drive price volatility.
Spain does have other suppliers – notably Algeria, which delivered a larger share of gas in 2025, as well as Nigeria, Angola, and Qatar – but none could fully replace US volumes at short notice without major cost and logistical hurdles.
For Madrid, losing the relatively stable flow of American LNG would be a real energy shock with wide-reaching repercussions.
READ MORE: EU leaders close ranks around Spain after Trump’s furious threat to cut trade over Iran tensions
But even here, the question remains – who stands to lose more?
In 2025, when Trump announced flat global tariffs of 15%, analysts feared key allies would look eastward, seeking trade alternatives in the ever-growing powerhouse of China.
If the US cut off vital LNG supplies, Sanchez would have to scramble for a reliable trade partner – and there are only so many places to turn.
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