Trump can use Greenland’s national interests to leverage a deal that gives him almost everything he wants. Here’s how.
Trump can use Greenland’s national interests to leverage a deal that gives him almost everything he wants. Here’s how.
C urb your enthusiasm: America is not buying Greenland from Denmark. There is, nevertheless, another way to secure our vital security interests in the vast island nation that is much more realistic: signing a Compact of Free Association (COFA).
Americans, perhaps including President-elect Trump, tend not to realize that Greenland is not a distant Danish province. It is a distinct nation that is in communion with the Danish Crown. It governs itself in virtually all respects apart from foreign policy and defense. It has its own parliament, levies its own taxes, and even has its own diplomatic representative in the United States.
Denmark, therefore, cannot sell us Greenland outright because it legally cannot do that without the Greenlanders’ consent.
Securing the Greenlanders’ consent is very unlikely, despite the brief scene of Greenlanders’ cheering reposted by the president’s son, Don Jr., on X during his brief trip there. Greenlanders are almost entirely indigenous Inuit peoples, not Danes. They have their own language and their own culture. They do not want to be a tiny part of a vast, culturally alien nation.
They don’t want to change which larger country they are part of; they want independence.
So, Denmark doesn’t want to sell to us, and Greenland doesn’t want to join us. Does that mean the case is closed?
Not at all. Trump can use Greenland’s desire for independence to leverage a deal that gives him almost everything he wants while also appealing to Greenland’s and Denmark’s pride and interests.
That’s what a COFA could do. The United States has three such treaties with the Republic of Micronesia, Palau, and the Marshall Islands. The U.S. supplies each with economic aid and access to many government programs such as Medicaid. Imports from these countries are largely tariff-free, and citizens of these nations can live and work in the United States.
In exchange, the U.S. handles all defense obligations. It can exclude other nations’ militaries, has certain rights to station troops and establish bases, and can operate its military forces within these nations’ boundaries.
This would meet the American desire to keep China and, to a lesser extent, Russia out of its backyard. The Arctic Ocean ice is rapidly melting, making the Arctic Sea lanes viable for shipping. China has shown a keen interest in the region, establishing a Polar Silk Road program to encourage its dominance in this increasingly important part of the world.
China has also tried to establish an economic foothold in Greenland. The island is reported to have significant reserves of rare earth minerals needed for modern electronic equipment — and China is currently the globe’s major supplier. It has also tried to exploit Greenland’s control over its own mineral development to start and explore for oil and natural gas.
China has thus far been largely unsuccessful, owing to heavy pressure from the Danish and U.S. governments. But there’s no guarantee a future Danish government would be receptive to Washington’s wishes, nor is it certain a future Greenlandic government would comply with them.
That’s where a compact would come in. It could establish American supremacy in defense matters and be crafted to give Washington veto power over foreign investment in Greenland’s resources.
This could be in both Greenland’s and Denmark’s interests. Greenland wants independence, but it is economically dependent upon an annual subsidy from Denmark. The latest figures I could find (2022) set that total at roughly 5.6 billion Danish crowns. That translates to about $783 million, which is certainly higher today since it increases each year with inflation.
That’s a huge amount for Denmark, whose entire budget is about 598 billion crowns a year — and that doesn’t even include money Denmark will have to pay to defend Greenland. Indeed, Denmark’s defense minister recently announced a package of new spending estimated at 12-15 billion Danish crowns for the island to purchase new patrol ships and make additional upgrades.
These sums are huge for tiny Denmark. They would be rounding errors in the Pentagon’s budget.
A COFA would permit Greenland to realize its desire for greater independence. The nation needs annual subsidies to remain economically viable in the short run, and it needs large-scale investment in mining and tourism to become financially self-sufficient. Denmark cannot supply the necessary funds to bootstrap Greenlandic independence; America could.
There are indications that Greenland thinks America’s interest could fuel its dreams of independence. It has the right under the act establishing its self-government to hold an independence referendum. The country’s prime minister, Múte Egede, called for independence in his New Year’s address, hinting that a referendum might be held coterminously with the country’s scheduled parliamentary election in April.
Independence negotiations between Denmark and Greenland must occur if a referendum succeeds. Denmark is not obligated to grant the nation’s wish, but with Trump breathing down its neck, it might just read the room and cut the best deal possible.
Negotiating a compact with the two nations will not be easy. Greenland’s government leans left and is inclined toward pacifism. Its recently published policy strategy for security and defense reiterates a desire for the Arctic to remain a “low tension” region. It regularly invokes a desire for peace, even as it reaffirms that NATO and the United States are important elements of its security. Getting the exact balance between American security interests and Greenlandic sensibilities right will require patience and skill.
Denmark’s leaders will also likely feel they are being forced to relinquish part of their country. It would be wise for Trump to sweeten the pot for them. He could offer Danish troops a prominent role in the island’s defense, perhaps even underwritten by America.
He could also explore ways to help the Danish economy, such as by moving to make Wegovy and other anti-obesity drugs made by Danish Novo-Nordisk eligible for Medicare and Medicaid reimbursement if prescribed for weight loss. The company’s success is already turbocharging the Danish economy; allowing tens of millions of Americans low-cost access to its drugs could make Denmark a Baltic Tiger.
None of this would come cheaply for the U.S., but it would certainly be hundreds of billions of dollars cheaper than negotiating a purchase price for a mineral-rich island that is Earth’s largest.
Trump’s public demands have ruffled many feathers. But it’s possible, if not likely, that the man who has mastered the art of the deal may be shifting the Overton window to create a win-win option for everyone.