Speaking in the Turkish capital Ankara, Trump called Madrid a "terrible partner" in NATO as he railed against allies for not supporting the war on Iran and ordered Treasury Secretary Scott Bessent to halt all trade with Spain.
Trump's remarks, also declaring the fragile ceasefire with Iran to be over, overshadowed a summit that European leaders had hoped would project unity and support for Ukraine and cap a series of rows that have threatened to tear the military alliance apart.
Trump spoke alongside NATO Secretary Mark Rutte, who has assiduously tried to assuage his concerns over defence spending, Iran and Greenland, while lavishing praise on the president for bringing such issues to the fore.
They also undercut the carefully crafted pre-summit messaging that European NATO countries had stepped up to the plate on military spending, which saw at least $US50 billion ($A72 billion) in defence initiatives unveiled on Tuesday.
Washington and Madrid have been at loggerheads, with Spain explicitly rejecting Trump's demands for European countries to sharply increase military spending and pay for their own defence.
Madrid's Socialist leadership has also refused to let the US use its airspace or bases on its territory for the Iran war.
"Spain is a wasted cause. We don't want to do any trade business with Spain any more," Trump said.
"By the way, I'd like to cut it off. Spain is a terrible partner in NATO. They don't participate, they don't pay. I don't want anything to do with Spain. Cut off all trade with Spain, including visits."
In response, the office of Prime Minister Pedro Sanchez said it was treating Trump's statements as business as usual, adding that bilateral relations benefited both countries.
Asked about Trump's remarks, a NATO diplomat said: "The answer to every question POTUS raises is clear: build a more European NATO. That's what we're doing in Ankara."
The US has unleashed new military strikes on Iran and revoked a licence allowing Iran to sell oil in response to attacks on three tankers.
It was the latest blow to a fragile ceasefire agreement in a war that is deeply unpopular in Europe.
"It's a very interesting question. To me, I think it's over. I don't want to deal with them," Trump said when asked whether the interim accord with Iran that envisaged hammering out a long-term peace deal by mid-August was over.
"They're scum. They're sick people. They're led by sick people."
"As far as I'm concerned, it's just a waste of time dealing with them," he said.
Rutte defended the new US strikes and played down Trump's disappointment with allies over the Iran war as "isolated cases".
"I think what you did last night was absolutely necessary. It was a very strong response," Rutte told Trump.
He also praised Trump for making European countries raise their game on defence spending.
"It's really important when it comes to NATO, what you have achieved, and this is a huge win," he said.
Trump has accused European nations of failing to let US forces use their airspace and bases on their territories during the war.
European officials have said they largely honoured their commitments to US forces, despite not having been consulted about a conflict that roiled their economies.
Trump also demanded that his country control Greenland, a semi-autonomous territory of Denmark, reviving an issue that has put severe strain on the alliance that has underpinned Western security since the start of the Cold War.
"Greenland is very important for the United States, but it's not important for Denmark," he said.
Danish Prime Minister Mette Frederiksen reiterated that Greenland was not up for grabs.
"We are ready to defend every inch of NATO, including our own territory," she said.
