First the threat of military intervention, then the acquisition through diplomacy, also understood as commercial negotiations. The United States’ aims on Greenland move along these directives, marked by Donald Trump’s imperialist statements and their downsizing by Secretary of State Marco Rubio. The military option still remains on the table, but the simplest one for Washington is still a procedure that refers to the acquisition of real estate. In a sector in which the US president is very comfortable.
How much is Greenland worth?
Already during his first term, Trump had raised the possibility of buying the large Arctic island from Denmark. But now it appears to be seriously considering the acquisition of Greenland. How much could such an operation be worth in economic terms? Let’s start with data from the World Bank, which attributes a figure of around 3.3 billion dollars to Greenland’s GDP (for comparison, the United States’ GDP exceeds 27 trillion dollars). But this sum does not represent the “purchase” price. The sales figure is expected to take into account Greenland’s potential value to the U.S. economy.
In fact, the value of the huge mineral reserves present on the island’s territory should be added to the evaluation, in particular copper and lithium, key resources for the production of batteries and electric vehicles. According to estimates, Greenland hosts mineral resources with a total value of around 4,400 billion dollars: 1,700 billion attributable to oil and gas – the extraction of which is prohibited from 2021 for environmental reasons – and 2,700 billion of metals, including the strategic rare earths. However, their extraction remains complex, due to the hostile climate, the shortage of labor and the limited availability of infrastructure.
For all these elements, Greenland’s valuation could be as high as $1.1 trillion, according to an analysis by Financial Times. For the conservative think tank American Action Forum, the market value of mineral resources alone would be around 200 billion dollars; however, considering the strategic weight of the island in the North Atlantic, the overall estimate for the acquisition of the island could rise up to 3 trillion dollars, equal to approximately 11 percent of the United States’ GDP and just over 8 percent of its public debt.
The confrontation between Denmark and the United States on the future of the island
Tension around the island of Denmark has risen since Trump, in the aftermath of the military action in Venezuela, said that “the United States needs Greenland” for its own security, alluding to its strategic position in the Arctic which, combined with the melting of the ice and technological progress, makes it increasingly a terrain for confrontation between great powers: China, Russia and, indeed, the United States.
The Arctic island is currently an autonomous territory of Denmark, with Copenhagen exercising control over its foreign and defense policy. Economically, Greenland depends on a subsidy from Copenhagen, which represents a fifth of its GDP, and on fishing.
But what Trump is tempted by are raw materials, of which the territory of the Arctic island is rich. Access to Greenland’s mineral resources is therefore considered crucial by the Americans (and not only), who in 2019 signed a memorandum on cooperation in this sector. Only four years later the Europeans arrived, signing a collaboration agreement, investing hundreds of millions of euros. The EU is looking at the island with interest: only last September the European Commission proposed to double financial support to Greenland, for a total of over 530 million euros in the next seven-year EU budget. China has also expressed interest in a similar deal.
Trump wants to get his hands on rare earths from Greenland
The table is then open. While France has announced that it is working with its partners on a reaction plan in the event of a possible American invasion of Greenland, US Secretary of State Marco Rubio will fly to Copenhagen in the next few days. The mission will probably serve to lay the foundations for an economic negotiation. Nuuk’s Foreign Minister, Vivian Motzfeldt, will also participate in the meeting, commenting: “No Greenland without Greenland. Obviously we will participate. We were the ones who requested the meeting”, recalling the rhetorical formula used by Ukrainian President Zelensky to reiterate that nothing regarding Kiev can be decided behind his back.
Previous attempts to purchase the island
Trump is not the first American president to have set his sights on Greenland. Already in the years following the end of the American Civil War, President Andrew Johnson, after having successfully purchased Alaska from Russia for 7.2 million dollars in 1867, considered taking over Greenland and Iceland for 5.5 million dollars, but never made a formal proposal. It was instead presented in 1946 by President Harry Truman who offered 100 million in gold to convince Denmark to sell. Without succeeding. Now it’s Trump’s turn, who wants to treat the deal like a “big real estate deal.”
