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Asset Allocation Research for UK Advisers

why does trump want greenland?

23/1/2026

 
Why does Trump want Greenland? Two game pieces, one with the USA flag and one with the Danish flag over a map of Greenland
Well it stopped the Europeans talking about Venezuala!

The Trump administration’s geostrategic focus on security for the Western hemisphere, dubbed the “Donroe” doctrine, can be simplified as keeping US interests up in the Americas and Russian/Chinese interests out.

Why the US Wants Greenland

Where does Greenland fit in to this?

Greenland is the world’s largest island approximately six times the size of Germany, 80% covered in ice, with a population of under 60,000 people.
Why is it suddenly so important?  It’s always been important and was crucial during the Cold War as territory between the US and Russia on the flight path of strategic intercontinental ballistic missiles (ICBMs).  This became less of a focus at the end of the Cold War.
Securing access to northern shipping lanes (and denying enemy access to the same) is the same reason that Britain occupied the neutral former Danish territory of Iceland at the start of the Second World War.  Admittedly, that was during wartime. But the whole point of geostrategic decisions is to consider "but what if we were at war?".  This is the more assertive posture the US is now adopting.

Greenland’s military importance

Greenland’s military importance is clear and undisputed.  It remains key for Early Warning Systems and any Ballistic Missile defence systems.  The US maintains a space base at Pituffik (formerly Thule Air Base) with early warning systems and had an even larger presence during the Cold War.  The 1951 Greenland Defense Agreement allows the US to operate in designated “defense areas” (there were 3 bases (2 have since closed)) and secure additional areas as required in consultation with Denmark. So militarily, the US arguably has most of what it needs under existing agreements.  But there’s an economic angle too.

Greenland’s economic importance

The US sees military security and economic security as an integrated whole.  Greenland’s economic importance is threefold
  1. access and ownership of the Arctic:  Russia, US, Canada and Denmark (via Greenland) all claim clashing ownership of zones extending from their respective landmass in entries submitted to the UN’s Commission on the Limits of the Continental Shelf (CLCS)
  2. trade routes: existing (North-West Passage) and future (Central Passage) shipping lanes as ice caps melt.
  3. energy and natural resources including rare earths: as US wants to boost its energy independence and secure its own supply chains for rare earths, Greenland (and its share of the Arctic) are a key resource.
This is why the US is focused on Greenland for economic as well as military security.  And whilst Trump’s mercantilist instincts are to create and secure opportunities for US interests, it is also to deny China/Russian interests and any access by the US’s strategic competitors to those same economic opportunities.  In this respect, Trump’s ambitions are wholly in keeping with the Donroe Doctrine.

Negotiating style

If Trump had most of what he needed under the military agreement, why all the rhetoric and threats?
Firstly, whilst military agreements are in place, there are none as regards economic or natural resources.  To shift the Overton window, an escalation to unreasonable position (the implication that military force and punitive sanctions was an option to secure Greenland, fragmenting NATO in the process) only to de-escalate to secure a target outcome (an economic treaty alongside an updated miliary one) is classic Trump negotiating playbook.  It’s surprising that European leaders are surprised.  Markets likewise fell for the rhetoric not the game.  The other reason Trump and his cabinet have such an abrasive negotiating style could be… because they enjoy it.  For hardcore patriotic Republicans, baiting the globalist liberal leadership epitomised by Davos – well – fun.  And plays well to the MAGA support base too.
​
It’s important to remember Trump’s negotiating playbook: 1) attack, attack, attack, 2) admit nothing, deny everything, 3) always claim victory.

Whether with the Panama Canal, or Greenland. The playbook is the same.  Try not to get triggered.

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