“I think it’s very disrespectful to Nato. In fact, I was thinking about giving them trade punishment through tariffs because of what they did, and I may do that,” Trump told reporters at the White House.

Trump suggested last week that Spain be expelled from Nato over its failure to match the higher defence spending requirement.

In June, the military alliance of 32 member states agreed to boost defence spending to 5% of annual economic output over the next decade under pressure from Trump.

But Spain, which was Nato’s lowest defence spender in relative terms last year, insisted it would not need to hit the headline figure.

Socialist Prime Minister Pedro Sanchez has argued that Spain should meet its capacity objectives rather than fixed spending targets, including cybersecurity and the environment in his calculations.

After Trump’s expulsion threat, government sources in Madrid said on Friday that “Spain is a committed and full member of Nato. And it meets its capacity targets as much as the United States.”