(Changes the day of the week in paragraph 1 to Wednesday (not Monday)

By David Latona and Charlie Devereux

MADRID (Reuters) -The European Commission and Spain’s government on Wednesday dismissed U.S. President Donald Trump’s latest threat to impose higher tariffs on Madrid over its refusal to meet his proposed NATO target for defence spending.

Trump said he was “very unhappy” with Spain for being the only country to reject the new spending objective of 5% of economic output, adding that he was mulling punishing the Mediterranean country. He had previously suggested making Spain “pay twice as much” in trade talks.

Trade policy falls under Brussels’ remit and the Commission would “respond appropriately, as we always do, to any measures taken against one or more of our member states,” Com

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