MADRID, July 9 (Reuters) - Spain said on Thursday that U.S. President Donald Trump had softened his rhetoric towards it, after threatening to halt trade, because he had learned of the significant increase in Spanish contributions to the alliance over the past few years.

During the NATO summit in Ankara on Wednesday, Trump described Spain as a "bad partner" and ordered an immediate halt to all trade with it following disagreements over defense spending and the US-Israeli war on Iran.

"I had problems, and I still have problems," Trump told reporters aboard Air Force One on his way back to the United States after the summit. "But Spain got back on track today. Spain was very generous today."

When asked what Spain had done, he said, "They responded to the request to pay large sums of money, and if they hadn't done that, we wouldn't have spoken to them at all."

A spokesman for Spanish Prime Minister Pedro Sanchez said this was understood as a sign that Madrid was complying with NATO's previous target of 2 percent of GDP for defense spending.

Sánchez affirmed at the summit that Spain would achieve this goal this year after more than doubling its nominal defense spending from 0.98 percent of GDP in 2017 to nearly €33 billion ($37.7 billion). He downplayed the disagreement, stating that he had a "very friendly" conversation with Trump during the summit.

But Trump has repeatedly criticized Spain for rejecting a new NATO target of spending five percent of GDP on defense by 2035.

The Spanish left-wing government says it wants to address real threats rather than increase spending just for the sake of increasing it, because that would mean cutting social benefits.

It is not yet clear what Trump's softening of his rhetoric might mean for his threat to halt trade.

When asked about the next steps following Trump's directives, a U.S. official in Washington told Reuters that relevant federal agencies would provide Trump with a "list" of Spanish products that could be banned.

Trade lawyers say Trump could invoke the International Emergency Economic Powers Act to impose a full or partial ban on Spanish imports. During his first term in 2018, Trump imposed a 30 percent tariff on Spanish black olives to combat dumping.