Only people from Spanish-Speaking Central America should identify as Hispanic. A Mexican-Spaniard should identify as Hispanic, while a Spaniard-Mexican should not.
HOWEVER, someone born in Mexico to White Hispanic parents but who was adopted by French parents in France and raised by them would probably identify as French.
Race is weird.
Only people from Spanish-Speaking Central America should identify as Hispanic. A Mexican-Spaniard should identify as Hispanic, while a Spaniard-Mexican should not.
HOWEVER, someone born in Mexico to White Hispanic parents but who was adopted by French parents in France and raised by them would probably identify as French.
I was under the impression it also applies to the Spanish-speaking American islands and North/South America.
ETA: And it’s controversial whether Brazil is counted.
The Spanish-Speaking American islands are in Central America, just like England and Sicily are in Europe.
Chile and Argentina, IIRC, are not Hispanic countries.
The term derives from Hispanic, meaning a resident of Hispanola, the island which now contains Haiti and The Dominican Republic.