President Donald Trump assailed Spain for refusing to agree to new defense spending targets adopted by NATO and suggested the country could be penalized by facing tariffs twice as high from the U.S.

“You’re the only country that is not paying. I don’t know what the problem is,” Trump said Wednesday at the NATO summit at The Hague when asked about Spain balking at paying 5% of their GDP on defense.

“We’ll make it up. You know, we’re going to do, we’re negotiating with Spain on a trade deal. We’re going to make them pay twice as much. And I’m actually serious about that,” Trump added.

Spain’s benchmark stock index extended its losses after Trump’s remarks, trading down 1.5%. The index was down about 1.3% prior to the comments. The Stoxx Europe 600 Index, the worst-performing major European benchmark on Wednesday, was down 0.6%.

“We downplay Trump’s comments and we emphasize our commitment to NATO,” a spokesperson for the Spanish government said. Spain is part of the European Union, which is racing to clinch a trade deal with Washington before tariffs on nearly all its exports to the U.S. jump to 50% on July 9. The European Commission, the executive arm of the EU, handles trade matters for the 27-member bloc — individual member states don’t negotiate trade deals on their own.

Trump has blasted the EU — which he has said was created to “screw” the U.S. — over its goods surplus and perceived barriers to American trade.

NATO members agreed at the summit Wednesday to raise their spending levels to 5% of GDP. Spanish Prime Minister Pedro Sanchez, however, has refused to meet the new target, saying the country can raise its expenditure to 2.1%, “nothing more, nothing less.”

Sanchez has said Spain will meet the alliance’s ambitious new weapons and troop targets, but without committing to the price tag that NATO had attached to it. Sanchez has drawn sharp criticism from fellow NATO members.

The U.S. has already introduced 25% tariffs on European automobiles as well as a 50% levy on steel and aluminum. Trump has also announced that the U.S. is working to expand tariffs to other sectors, including pharmaceuticals, semiconductors and commercial aircraft.

Many in the EU expect that most of the U.S. tariffs will remain in place even if a deal is reached, including a 10% baseline tariff. The EU estimates that U.S. duties now cover €380 billion ($439 billion), or about 70%, of its exports to the U.S.

The EU has already approved tariffs on €21 billion of U.S. goods that can be quickly implemented in response to levies Trump imposed on aluminum and steel exports. The duties target politically sensitive American states and include products such as soybeans from Louisiana, home to House Speaker Mike Johnson, as well as agricultural products, poultry and motorcycles.

The bloc is also preparing an additional list of tariffs on €95 billion of American products in response to Trump’s so-called reciprocal levies and automotive duties. That list could change as member states and industries seek amendments that could protect their sectors.

“I’m going to negotiate directly with Spain. I’m going to do it myself,” Trump insisted. “They’re going to pay, they’ll pay more money this way.”

With assistance from Blaise Robinson.