Amongst the many balls which Trump keeps on throwing in the air, the recent one on Greenland is almost about to rupture NATO itself. Trump's confidence is high after recent strikes in Venezuela and last year's tactical strikes on Iran. So he is very serious about his intentions on Greenland. But this is a direct challenge to EU as Greenland is a semi-autonomous, overseas country and territory of the EU that is associated with the European Union through Denmark though officially not a part of the EU. We see three reasons for Trump's fascination with Greenland. 1) Security 2) Significant Commercial Potential 3) Transformative impact of Arctic shipping routes. On security itself, US military presence in Greenland has declined greatly since the Cold War. There is expanding military and economic competition in the region, and Trump appears keen to pre-empt and deny rivals (e.g. Russia and China) access to strategic footholds, both geographically but also in critical sectors. Russia’s military deployment remains the largest by any Arctic state, with over 40 bases restored since 2014, extensive air defence and coastal forces. China too has sought to grow its influence in the region as a “near Arctic” state through its 2018 Polar Silk Road. China has launched research expeditions and invested in infrastructure and natural resources. On commercial potential, Greenland sits on an estimated 1.5 million tonnes of rare earth minerals in addition to other key minerals, making it a potential linchpin for technology and clean energy industries. Greenland also has significant undiscovered conventional oil and gas potential, possibly billions of barrels of oil equivalent. On the Arctic shipping route, global warming may create transformative opportunities for shipping as Arctic Sea routes become increasingly navigable. Some studies suggest the first ice-free days could occur as early as 2027-2030 along some Arctic routes and multiple climate model projects assess that the Arctic’s major northern sea routes will become reliably navigable during late summer by 2045-2060. We see 4 scenarios by which current issue can unfold. Scenario 1: Deal to offer Trump a win on key interests (with no constraints on Greenland/Denmark sovereignty). Scenario 2: A Long-Term Strategic Lease (lesser constraints on Greenland sovereignty) In a manner similar to US strategic facilities at Guantanamo Bay and Diego Garcia, the US could seek a similar long-term presence in Greenland. Scenario 3: Compact of Free Association: In this scenario, Greenland could pursue some sort of Compact of Free Association (similar to what the US has with the Federated States of Micronesia, the Marshall Islands or Palau. Scenario 4: Military Engagement: White House officials have stated that military options remain on the table if Greenland cannot be acquired peacefully. This scenario means the end of NATO as we know currently. Our own view is that the 1951 agreement between Denmark and the US already allows the US to increase its military presence in the territory (which it has scaled back to just 200 personnel currently from almost 50 bases and radar stations and 10,000 personnel at its peak). Official negotiations would be required for the ramp-up of US military personnel and hardware on the island, or the establishment of new bases. However, Denmark’s government (along with the EU) could send a clear signal that it would accommodate an increased US military presence. Denmark could go further by offering the US the right of refusal for third parties, such as Russia and China, to establish military or commercial interests in the territory. This could further placate Trump if his ambitions are primarily related to Greenland’s abundant natural resources especially if it were combined with an offer of increased access for US companies interested in mineral exploration and extraction. But this can also be used in military terms via a concept called "Trojan Horse Takeover". In this the US uses the 1951 defence agreement with Greenland to deploy additional troops, but the US troops deviate from their routine activities and take control of government functions and institutions. This scenario would have the same consequences as an overt military takeover including the collapse of the transatlantic relationship, including NATO. In the end only Trump knows how he will catch this ball.
