Spain Rejects U.S. F-35 Jets Amid Rising Tensions with Washington

Spain has shelved its plans to acquire U.S.-built F-35 fighter jets, opting instead for European-made alternatives. The decision signals Madrid’s growing strategic divergence from Washington as diplomatic friction escalates and defense priorities shift across the continent.

Madrid Doubles Down on European Defense Sovereignty

The Spanish Ministry of Defense confirmed that it will not proceed with the purchase of Lockheed Martin’s F-35 Lightning II. Instead, Spain is redirecting its focus to strengthening the Eurofighter Typhoon fleet and doubling down on the Future Combat Air System (FCAS), a next-generation fighter program jointly developed with France and Germany.

Budget allocations reflect that pivot. Of the €10.5 billion earmarked for Spain’s next defense modernization phase, more than 85% will be spent on European manufacturers. A previous €6.25 billion F-35 acquisition plan has effectively been dropped. Madrid’s defense strategy now revolves around strengthening domestic capability and reducing technological reliance on the United States.

Naval Airpower Faces Operational Void

One strategic consequence of the decision is the lack of a clear replacement for Spain’s aging Harrier fleet. Without vertical takeoff aircraft like the F-35B, the Juan Carlos I aircraft carrier will likely operate without fixed-wing air support once the Harriers are retired by 2030. For now, that capability gap remains unresolved.

The Spanish Air Force, in contrast, has until 2035 to phase out its F-18s, giving more runway to integrate new platforms. While many NATO allies—such as the UK and Italy—continue integrating F-35 variants, Spain is leaning firmly toward defense autonomy, even at the cost of short-term capability.

Political Crosswinds Complicate Procurement Decisions

The rejection of the F-35 comes amid rising political tension with Washington. Former President Donald Trump has publicly criticized Spain for resisting calls to increase defense spending to 5% of GDP. Spanish officials, meanwhile, remain committed to staying below 3%, citing EU treaty limitations and broader fiscal priorities.

This friction has injected uncertainty into U.S.-Spain relations and may trigger broader implications for defense cooperation and bilateral trade. While Spain’s pivot is framed as industrial policy and European solidarity, it’s also interpreted by analysts as a hedge against volatility in American foreign policy.

European Defense Contractors Stand to Gain

The primary beneficiaries of Madrid’s new course are likely to be European firms. Airbus and Dassault Aviation, key players in FCAS, stand to receive increased funding. Spanish firms such as Indra, a major subcontractor in defense systems, are also positioned for upside.

However, defense analysts caution that excluding the F-35 may limit Spain’s interoperability within NATO missions. The F-35 is currently the most widely adopted stealth platform across allied forces, and future coalition deployments could expose operational asymmetries.

Tips for Traders

• Track European defense equities like Airbus and Dassault for capital inflows driven by increased procurement.

• Watch Spanish contractors such as Indra for contracts linked to FCAS and naval defense upgrades.

• Monitor Spain’s sovereign bond market for signals tied to elevated defense budgets and external political risk.

• Evaluate the impact on U.S. defense firms such as Lockheed Martin (NYSE: LMT) from lost European orders.

• Stay alert to NATO strategic communications—Spain’s divergence may shape defense integration trajectories across the bloc.