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Does Trump really want to buy Greenland? If so, why? | Frank Kelly

1/15/2025

Frank Kelly discusses two strategic reasons why Trump is likely so interested in Greenland and where he believes this will all end up.

Francis (Frank) J. Kelly

Founder & Managing Partner, Fulcrum Macro Advisors LLC and Senior Political Strategist for DWS

Would the U.S. use force? Would the U.S. purchase?
This is not a new idea
Two strategic reasons why Trump is likely so interested in Greenland
Where does this all end up?

We wanted to offer a quick note on what is driving the ongoing discussion and debate around President-elect Donald Trump’s statements about the U.S. buying Greenland.

Why Greenland?

First – as clients have repeatedly asked, is President Trump serious? Our view is that the president-elect is quite serious about the idea and has a number of strategic reasons for wanting to make the acquisition. Specifically, Trump sees an acquisition of Greenland as a way to enhance security in the Artic region against Russia and China and also to access what has been proven to be massive and varied critical mineral deposits (and, in turn, to chase off growing Chinese mining investments being made in Greenland).

Would the U.S. use force?

One point that is unsettling markets is the question of just how serious Trump is about possibly using force to obtain Greenland. Trump has said on several occasions he “will not rule out” taking the island by force. Our view is that will never happen. Quite simply, the idea of the U.S. attacking a fellow NATO member is risible and, quite frankly, reckless (Greenland is an autonomous territory of the Kingdom of Denmark. Denmark is a member of NATO; therefore, taking Greenland by force would be an attack on Denmark). Without going too deeply down this political rabbit hole, we would point out that if the U.S. did move to take Greenland by force, then Denmark could invoke Article 5 of the NATO Treaty, which, in essence, states that if one member of NATO is attacked, then all the other members are obliged to come to the military defense of that member nation (the last time it was invoked was after the 9/11 attacks in the U.S.). Therefore, if Trump were to use military force, he literally would provoke a war with every other NATO member, and that will never happen.

Would the U.S. purchase?

Getting back to the idea of acquiring—rather than seizing—Greenland, we would note that President Trump first talked about the United States purchasing Greenland — the world’s largest island — in his first presidential term (2019). He picked the idea back up again in late December, which in turn has fueled an ongoing national debate (and much mockery) about the idea.

This is not a new idea.

However, we also think it is essential to know the history of the U.S. and Greenland to fully understand Trump’s idea.

1867 – The U.S. had sought to acquire Greenland several times before starting in 1867 when then-Secretary of State William Seward (who oversaw the acquisition of Alaska) tried to buy Greenland, too. Seward even advocated for the military annexation of Greenland and Iceland. The U.S. almost pulled off the acquisition – offering $5.5 million. But at the last minute, Seward (for reasons still not clear) pulled back.
1910 and 1946 – The idea came back up in 1910 and again in 1946 (the U.S. offered Denmark $100 million - $1 billion in today’s dollars – for the island). And there have been various discussions about the U.S. bolstering U.S. military operations – including basing an entire U.S. Naval fleet – in Greenland.
Interestingly and not well known – The U.S. militarily occupied Greenland during World War II after Denmark was invaded and occupied by Germany to prevent Nazi forces from then sending troops to occupy Greenland. The U.S. has long seen Greenland as vital to U.S. national security and has had a military presence there ever since at Pituffik Space Base.

Two strategic reasons why Trump is likely so interested in Greenland

The National Security Reason: With the increased thawing of the Arctic region and the significant uptick of shipping through the Arctic (especially by Russia and China), NATO has grown its focus on the area, establishing the Joint Arctic Command. Greenland falls within the region, and Denmark, being part of NATO, now has Naval frigates, maritime air patrol units, which include advanced F-35 fighters, and even military dogsled teams based in Greenland to patrol the Arctic.

The U.S. has an important missile early warning system in Greenland – and in the age of Russia’s development and use of hypersonic missiles against Ukraine – this capability is now of even more importance to U.S. security.

The Economic/Critical Minerals Reason: This may be the ultimate reason for Trump’s interest. Incoming Trump National Security Advisor Michael Walz recently said, “This is about critical minerals. This is about natural resources.” Greenland has proven to be rich in a number of critical minerals as well as significant oil and gas deposits (both onshore and offshore). Among the critical minerals in Greenland are vast deposits of copper, lithium, zinc, nickel, and cobalt (see chart below).

Currently, China has something of a chokehold on critical minerals with more than 60 percent of the world’s production and the U.S. (as well as EU and NATO allies) are determined to break it. Looking at Greenland, China currently has mining interests in Greenland, in particular, the Citronen Fjord zinc project in Northern Greenland and the Kvanefjeld (Kuannersuit) Rare Earth Element (REE)-uranium project in Southern Greenland.*

So, where does this all end up? Will the U.S. buy Greenland?

At the end of the day, we do not think the U.S. will end up acquiring Greenland. Denmark does not want to sell it. The people of Greenland are actually pushing hard for independence from Denmark and, by all reports, have little or no interest in becoming part of the United States.

We do not think the Greenland debate will end anytime soon and will be played out for a protracted period. But our view is that what we are likely to see is that the true prize for the U.S. will be enhanced military capabilities being based in Greenland along with some sort of deal giving US interests better access to critical minerals and oil/gas drilling — all of which would be a net positive for the U.S. and markets.

Chart: Assessment of mineral criticality based on economic importance and supply risk (after European Commission 2023). Raw materials shown in red are considered critical by the EU. Please note that copper and nickel do not meet the critical raw materials (CRM) thresholds but were included in the CRM list due to their status as strategic raw materials (European Commission 2023). The methodology for the EU criticality assessment is based on the main criteria of supply risk (SR) and economic importance (EI), with thresholds of SR > 1.0 and EI > 2.8.

Chart source: MiMa Center for Minerals and Materials, MiMa rapport 2023/1, “Review of the critical raw material resource potential in Greenland,” page 12.

* Source: The Arctic Yearbook, “Chinese Mining in Greenland: Arctic Access or Access to Minerals?” by Patrik Andersson, Jesper Willaing Zeuthen & Per Kalvig

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Francis (Frank) J. Kelly

Frank is the Founder and Managing Partner of Fulcrum Macro Advisors LLC, a political risk advisory firm based in Washington, DC. He is the senior political strategist for DWS.

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Does Trump really want to buy Greenland? If so, why? | Frank Kelly

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